Calculate the internal rate of return for the project.
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Project 1 requires an initial investment on $50,000 and has an internal rate of return (IRR) of 18%. A mutually exclusive alternative, Project 2, requires an investment of $70,000 and has an IRR of 23%. Which of the following statement is true concerning the rate on the incremental $20,000 investment?
a) it is less than 18%
b) it is between 18 and 23%
c) it is greater than 23%
d) it cannont be determined from the data given
What are the comparative advantages of NPV, annual worth, and internal rate of return?
Briefly explain what the modified internal rate of return is and why it is needed.