Exercise 2513A Internal rate of return LO P4 Following is in

Exercise 25-13A Internal rate of return LO P4 Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% return from its investments Project X1 s (86,e00) Project X2 $(132,000) Initial investment Expected net cash flows in year: 28,000 38,500 63,500 64,500 54,500 44,500 2 Compute the internal rate of return for each of the projects using excel functions and based on internal rate of return, indicate whether each project is acceptable. (Round your answers to 2 decimal places.) IRR Acceptable? Project X1 Project X2

Solution

IRR

Acceptable?

Project X1

21%

Yes

Project X2

12%

Yes

	IRR	Acceptable?
Project X1	21%	Yes
Project X2	12%	Yes