Consider three investments with the following sequences of cash flows: 

a) Identify the simple and nonsimple investment(s). Explain.
b) Find I* values for each project. If there is more than one I* value, find all of them.

c) Compute the true IRR for each project
d) Determine the acceptability of each project on the basis of the IRR criterion.
 

Transcribed Image Text:

Net Cash Flow Project 3 -4,200 Project 2 -4,200 6,550 -2,090 Project 1 -4,200 1 800 7,930 2 3,240 -640 Net Cash Flow Project 3 -4,200 Project 2 -4,200 6,550 -2,090 Project 1 -4,200 1 800 7,930 2 3,240 -640

Answer rating: 100% (QA)

a Project 1 simple investment Project 2 non simple investment Project 3 ... View the full answer