Solution-Compute the internal rate of return

Compute the internal rate of return

Reference no: EM132702478

Question - Farrah Corporation is considering two projects (see below). For your analysis, assume these projects are mutually exclusive with a required rate of return of 12%.

	Project 1	Project 2
Initial investment	$185,000	$1,100,000
Cash inflow Year 1	$230,000	$1,450,000

Required -

1. Compute the following for each project:

NPV (net present value)

PI (profitability index)

IRR (internal rate of return)

2. Which project should be selected? Why?

Reference no: EM132702478

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Compute the internal rate of return

Reference no: EM132702478

Reference no: EM132702478

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