1. The following cash flows are associated with three alternatives under consideration by the firm: N...

 

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1. The following cash flows are associated with three alternatives under consideration by the firm: N (Year) 0 1 2 3 4 A1 (TL) 0 4,500 4,500 4,500 4,500 4,500 A2 (TL) -50,000 20,000 20,000 20,000 20,000 20,000 A3 (TL) -75,000 20,000 25,000 30,000 35,000 40,000 If interest rate for the firm is 12%, compare the alternatives using the internal rate of return method (IRR method) and incremental cash flow approach. Which alternative should be selected? Why? 1. The following cash flows are associated with three alternatives under consideration by the firm: N (Year) 0 1 2 3 4 A1 (TL) 0 4,500 4,500 4,500 4,500 4,500 A2 (TL) -50,000 20,000 20,000 20,000 20,000 20,000 A3 (TL) -75,000 20,000 25,000 30,000 35,000 40,000 If interest rate for the firm is 12%, compare the alternatives using the internal rate of return method (IRR method) and incremental cash flow approach. Which alternative should be selected? Why?

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Okay lets solve this stepbystep 1 Calculate the IRR for each ... View the full answer