Evaluate the Following Mutually Exclusive Projects Using IRR as a Selection

question 97

Essay

Evaluate the following mutually exclusive projects using IRR as a selection criterion.Assuming the discount rate to be 14%,which project-if either-would be selected? Project A costs $50,000 and returns $15,000 after-tax annually.Project B costs $35,000 and returns $11,000 after-tax annually.Both projects last 5 years.

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Definitions:

Analytic Intelligence

One aspect of human intelligence that involves the ability to analyze, evaluate, judge, compare, and contrast information.

Intuitive

Referring to understanding or knowing something instinctively, without the need for conscious reasoning.

Strategic

refers to the careful planning and management of resources to achieve a specific goal or to gain an advantage.

Fluid Intelligence

The capacity to reason quickly and think abstractly, enabling problem solving and learning in novel situations.