
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:Following is information on two alternative investments. Beachside Resort is considering building a new pool or
spa. The company requires a 10% return from its investments.
Initial investment
Net cash flows in:
Year 1
Year 2
Year 3
Year 4
Year 5
Pool
Spa
IRR
Pool
$ (177,000)
%
%
41,700
57,700
81,995
92,100
66,700
Compute the internal rate of return for each of the projects using excel functions.
Note: Round your answers to 2 decimal places.
Spa
$ (122,000)
33,700
51,700
67,700
73,700
25,700
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