ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Management of Cullumber, Inc., is considering investing in three independent projects. The costs and the cash flows are given in the
following table. The appropriate cost of capital is 13.46 percent.
Year
0
1
2
3
4
Project 1
-$250,000
63,000
81,100
78,000
101,200
Project 2
-$323,400
The IRR of project 1 is
152,525
168,350
105,900
Compute the project IRRs. (Round final answers to 2 decimal places, e.g. 15.25%.)
Project 3
-$500,000
197,100
197,100
197,100
197,100
Identify the projects that should be accepted.
Cullumber should accept project(s)
%, project 2 is
%, and project 3 is
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Transcribed Image Text:Management of Cullumber, Inc., is considering investing in three independent projects. The costs and the cash flows are given in the following table. The appropriate cost of capital is 13.46 percent. Year 0 1 2 3 4 Project 1 -$250,000 63,000 81,100 78,000 101,200 Project 2 -$323,400 The IRR of project 1 is 152,525 168,350 105,900 Compute the project IRRs. (Round final answers to 2 decimal places, e.g. 15.25%.) Project 3 -$500,000 197,100 197,100 197,100 197,100 Identify the projects that should be accepted. Cullumber should accept project(s) %, project 2 is %, and project 3 is
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