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Extra Review Problems with Answers Lucas Company is considering a project with an initial investment of $530,250 in new equipment that will yield annual net cash flows of $95,000, and will be depreciated at $75,750 per year over its seven-year life. What is the internal rate of return? 1. 2. Kenner Company is considering two projects. Proiect A $85,000 $24,000 Project B Initial investment Annual cash flows Life of the project Depreciation per year $20,676 $6,011 6 years 5 years $14,167 $4,800 Which of the two projects, A or B, is better in terms of internal rate of return? 12% Suppose that Kenner Company requires a minimum rate of return of 8%, which project is better in terms of net present value? 3. (.964) neoative = NPV, Lao, 67GX4.lit)-gs,00u NV (wolx.4) 4,000 1.923 pasihive