Smith Products in E12- 45B. Compute the IRR of each project and use this information to identify the better investment. E12- 47B
In E12- 45B
• Project A costs $ 260,000 and offers seven annual net cash inflows of $ 59,000. Smith Products requires an annual return of 16% on projects like A.
• Project B costs $ 390,000 and offers nine annual net cash inflows of $ 71,000. Smith Products demands an annual return of 12% on investments of this nature.