APPLY THE CONCEPTS: Internal rate of return The Underwood purchasing department has made revisions to their...

APPLY THE CONCEPTS: Internal rate of return

The Underwood purchasing department has made revisions to their costs and annual cash flows for Project A and Project B, as outlined below.
Project A	Project B
Project A's revised investment is $250,700. The project's life and cash flow have changed to 7 years and $51,500, respectively, while expenses have been eliminated.	Project B's revised investment is $119,800. The project's life and cash flow have changed to 6 years and $82,500 while expenses reduced slightly to $55,000.

Compute the internal rate of return factor for Project A and Project B and then identify each project's corresponding percentage from the PV ordinary annuity table.

Note: Enter the IRR factor, to 5 decimal places.

Project A: The calculated IRR factor is and this value corresponds to which percentage in the present value of ordinary annuity table? %

Project B: The calculated IRR factor is and this value corresponds to which percentage in the present value of ordinary annuity table? %

Expert Solution

ekkarill92 answered 2 years ago

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