The following cash flow estimates have been developed for two small, mutually exclusive investment alternatives. The...

 

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The following cash flow estimates have been developed for two small, mutually exclusive investment alternatives. The minimum attractive rate of return is 15% per year. End of Year 0. 3 Alternative 1 -$2,500 750 750 750 750 2,750 Alternative 2 -$4,000 1,200 1,200 1,200 1,200 3,200 1. IRR of alternative 2 is closest to: А. 12% В. 15% С. 18% E. 25% D. 20% Formula used: The incremental IRR is closest to? A. 12% 2. B. 15% C. 18% D. 20% E. 25% Formula used; Which alternative should be selected? A. Alternative 1 B. Alternative 2 C. Neither D. Both 1 and 2 Decision Criterion: 3. The following cash flow estimates have been developed for two small, mutually exclusive investment alternatives. The minimum attractive rate of return is 15% per year. End of Year 0. 3 Alternative 1 -$2,500 750 750 750 750 2,750 Alternative 2 -$4,000 1,200 1,200 1,200 1,200 3,200 1. IRR of alternative 2 is closest to: А. 12% В. 15% С. 18% E. 25% D. 20% Formula used: The incremental IRR is closest to? A. 12% 2. B. 15% C. 18% D. 20% E. 25% Formula used; Which alternative should be selected? A. Alternative 1 B. Alternative 2 C. Neither D. Both 1 and 2 Decision Criterion: 3.

Answer rating: 100% (QA)

G53 fx IRRG47652 A B C D E F G H 1 K L M A2 Differnce 45 A1 46 year 47 ... View the full answer