Calculate the irr of the differential cash flows

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Q1. Coquitlam Construction Inc. has recently bought an asset costing $525,000. The asset assumes a useful of 4-year, $90,000 salvage value, and is depreciated on a straight-line method. It is reported that the company posted net income of $15,000, $18,500, $20,000, and $21,000 over the last four years. Calculate the company's average accounting return over the past four years based on the information given above (Show all necessary calculations).

Q2. Project Alpha and Beta have 4 year timelines. Project Alpha has an initial investment of $100,000 and cash inflows of $60,000, $50,000, $40,000 and $40,000. Project Beta has an initial investment of $75,000 and cash inflows of $50,000, $40,000, $30,000 and $30,000. Calculate the IRR of the differential cash flows between the two projects at which the company will be indifferent (Show all necessary calculations).

Reference no: EM133074182

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