Problem 7-29 Calculating Incremental Cash Flows

Darin Clay, the CFO of MakeMoney.com, has to decide between the following two projects:

Year	Project Million			Project Billion
0	$	2,400			$Io
1	lo +	280		lo	+ 1,000
2		1,080			1,800
3		1,800			2,800

The expected rate of return for either of the two projects is 12 percent. What is the range of initial investment (I_o) for which Project Billion is more financially attractive than Project Million? (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).)

Initial investment

(Click to select) equal to--less than--more than

$