Question

MOHAMMED AL ALAMI & 11/2/19 11:26 AM IDE 300 FALL19-C671020) HW Score: 72 55%, 12 33 of 17 pts ncemer Homework: Ch. 7 ROR + Ch.4 Score: 0 of 1pk 10017 (13 complete) Problem 7-37 (algorithmic) Consider two investments A and B with the sequences of cash flows given in the table below. Click the icon to view the cash flows for the projects (a) Compute the IRR for each investment More Info The rate of return for Project Als 33% (Round to one decimal place.) 14 0 and ng Project B -590 000 Net Cash Flow Project $105 000 35.000 35 000 140,000 25,000 25.000 150.000 Print Done Enter your answer in the answer box and then click Check Answer 5 parts Clear All remaining Check Answer PIUTUUS

Need IRR for both projects ASAP

Answer 1

Ans Project A: 33.33%

Project B: 36.94%

PROJECT A
Year	Project Cash Flows (i)	DF@ 10%	DF@ 10% (ii)	PV of Project ( (i) * (ii) )	DF@ 40% (iii)	PV of Project A ( (i) * (iii) )
0	-105000	1	1	(1,05,000.00)	1	(1,05,000.00)
1	35000	1/((1+10%)^1)	0.909	31,818.18	0.714	25,000.00
2	35000	1/((1+10%)^2)	0.826	28,925.62	0.510	17,857.14
3	140000	1/((1+10%)^3)	0.751	1,05,184.07	0.364	51,020.41
		NPV		60,927.87	NPV	(11,122.45)
	IRR =	Ra + NPVa / (NPVa - NPVb) * (Rb - Ra)
		10% + 60927.87 / (60927.87 + 11122.45) * 30%
		33.33%

PROJECT B
Year	Project Cash Flows (i)	DF@ 10%	DF@ 10% (ii)	PV of Project ( (i) * (ii) )	DF@ 40% (iii)	PV of Project A ( (i) * (iii) )
0	-90000	1	1	(90,000.00)	1	(90,000.00)
1	25000	1/((1+10%)^1)	0.909	22,727.27	0.714	17,857.14
2	25000	1/((1+10%)^2)	0.826	20,661.16	0.510	12,755.10
3	150000	1/((1+10%)^3)	0.751	1,12,697.22	0.364	54,664.72
		NPV		66,085.65	NPV	(4,723.03)
	IRR =	Ra + NPVa / (NPVa - NPVb) * (Rb - Ra)
		10% + 66085.65/(66085.65 + 4723.03) * 30%
		36.94%