Question: AB Lean has identified two mutually exclusive projects with the following cash flows. Year 0 1 2 3 4 5 Cash Flow Project A -52,000.00
AB Lean has identified two mutually exclusive projects with the following cash flows.
| Year | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash Flow Project A | -52,000.00 | 25,000.00 | 17,000.00 | 14,000.00 | 12,000.00 | 9,000.00 |
| Cash Flow Project B | -52,000.00 | 17,800.00 | 17,000.00 | 16,000.00 | 17,000.00 | 22,000.00 |
The company requires a 12.5% rate of return from projects of this risk. What is the IRR of project B?
| a. | 12.06% | |
| b. | 12.94% | |
| c. | 20.80% | |
| d. | 13.90% | |
| e. | 14.68% | |
| f. | 13.05% |
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