Rajawali Sdn Bhd has two potential projects with an initial cost of RM1,500,000. The capital budget for the year will only allow the company to accept one of the two projects. Year Project A Project B 1 RM400,000 RM200,000 2 RM400,000 RM400,000 RM400,000 RM600,000 4 RM400,000 RM400,000 5 RM400,000 RM1,000,000 The cost of capital is 11%.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...
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Calculate : 

Internal rate of return for Project A. (Use interpolation technique)

Rajawali Sdn Bhd has two potential projects with an initial cost of RM1,500,000. The capital
budget for the year will only allow the company to accept one of the two projects.
Year
Project A
Project B
1
RM400,000
RM200,000
2
RM400,000
RM400,000
3
RM400,000
RM600,000
4
RM400,000
RM400,000
RM400,000
RM1,000,000
The cost of capital is 11%.
LO
Transcribed Image Text:Rajawali Sdn Bhd has two potential projects with an initial cost of RM1,500,000. The capital budget for the year will only allow the company to accept one of the two projects. Year Project A Project B 1 RM400,000 RM200,000 2 RM400,000 RM400,000 3 RM400,000 RM600,000 4 RM400,000 RM400,000 RM400,000 RM1,000,000 The cost of capital is 11%. LO
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