Compute the internal rate of return for each of the projects using Excel functions, Based on internal rate of return, indicate whether each project is acceptable. (Round your answers to 2 decimal places.) Project X1 Project X2 IRR % % Acceptable?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 9PB: Joliet Company is considering two alternative investments. The company requires an 18% return from...
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Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5%
return from its investments.
Initial investment
Net cash flows in:
Year 1
Year 2
Year 3
Project X1
Project X2
IRR
Project X1
$ (122,000)
%
46,000
56,500
81,500
Compute the internal rate of return for each of the projects using Excel functions, Based on internal rate of return, indicate whether
each project is acceptable. (Round your answers to 2 decimal places.)
Project X2
$ (204,000)
Acceptable?
91,500
81,500
71,500
Transcribed Image Text:Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5% return from its investments. Initial investment Net cash flows in: Year 1 Year 2 Year 3 Project X1 Project X2 IRR Project X1 $ (122,000) % 46,000 56,500 81,500 Compute the internal rate of return for each of the projects using Excel functions, Based on internal rate of return, indicate whether each project is acceptable. (Round your answers to 2 decimal places.) Project X2 $ (204,000) Acceptable? 91,500 81,500 71,500
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ISBN:
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OpenStax College