Question: There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $34,853 and is expected to

There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $34,853 and is expected to generate the following cash flows:

First Year. Second Year Third Year Total

Alpha Project $32,500 $22,000 $5,000 $59,500

Beta Project 7,500 24,000 28,816 60,316

A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. Alpha Project fill in the blank 1% Beta Project fill in the blank 2% B. Make a recommendation on which one to accept.

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