Calculate the internal rate of return for each project

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Question - Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows associated with each project are given in the following table:

Cash flows

Project A

Project B

Project C

Initial Investment

60,000

100,000

110,000

Cash Inflows, years 1-5

20,000

31,500

32,500

Required -

a. Calculate the payback period for each project

b. Calculate the net present value (NPV) of each project, assuming that the firm has a cost of capital equal to 13 percent.

c. Calculate the internal rate of return for each project.

d. Which project would you recommend basing on your answers in (a), (b) and (c)? Discuss.

Reference no: EM133013956

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