APPLY THE CONCEPTS: Internal rate of return The Sutherland purchasing department has made revisions to their costs and annual cash flows for Project A and Project B, as outlined below. Project A Project B Project A's revised investment is $217,300. The Project B's revised investment is $116,700. project's life and cash flow have changed to 6 The project's life and cash flow have changed years and $47,000, respectively, while expenses to 5 years and $85,000 while expenses have been eliminated. reduced slightly to $55,000. Compute the internal rate of return factor for Project A and Project B and then identify each project's corresponding percentage from the PV ordinary annuity table. Note: Enter the IRR factor, to 5 decimal places. Project A: The calculated IRR factor is and this value corresponds to which percentage in the present value of ordinary annuity table? % Project B: The calculated IRR factor is and this value corresponds to which percentage in the present value of ordinary annuity table? %
APPLY THE CONCEPTS: Internal rate of return The Sutherland purchasing department has made revisions to their costs and annual cash flows for Project A and Project B, as outlined below. Project A Project B Project A's revised investment is $217,300. The Project B's revised investment is $116,700. project's life and cash flow have changed to 6 The project's life and cash flow have changed years and $47,000, respectively, while expenses to 5 years and $85,000 while expenses have been eliminated. reduced slightly to $55,000. Compute the internal rate of return factor for Project A and Project B and then identify each project's corresponding percentage from the PV ordinary annuity table. Note: Enter the IRR factor, to 5 decimal places. Project A: The calculated IRR factor is and this value corresponds to which percentage in the present value of ordinary annuity table? % Project B: The calculated IRR factor is and this value corresponds to which percentage in the present value of ordinary annuity table? %
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 8P: Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley...
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