Solution-Determine the internal rate of return

Determine the internal rate of return

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Cheryl Weber is trying to choose among three mutually exclusive projects. Accordingly, Cheryl must choose only one (perhaps none) of the projects. Her Minimum Acceptable Rate of Return (MARR) is 13%. The expected after-tax cash flows from the three projects are shown below:

	Time 0	Time 1	Time 2	Time 3
Project A	-$96,000	$36,000	$49,600	$49,600
Project B	-$40,000	$19,600	$19,600	$19,600
Project C	$64,000	-$24,000	-$24,000	-$24,000

Required:

Determine the internal rate of Return (IRR) for each project. Based solely on the individual IRR's, and nothing else, which is the best project?
Using the Incremental Rate of Return, determine which is the best project.
For what range of MARR's is project A the best choice? For what range of MARR's is project B the best choice? For what range of MARR's is project C the best choice, and for what range of MARR's should Cheryl choose one of the projects?
Determine the Net Present Value (NPV)of each project. Which is the best?
After all of the above, which project should Cheryl choose and why?

Reference no: EM133072691

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Determine the internal rate of return

Reference no: EM133072691

Reference no: EM133072691

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