Question

 Bell Manufacturing is attempting to choose the better of two mutually exclusive projects for expanding the​...

 Bell Manufacturing is attempting to choose the better of two mutually exclusive projects for expanding the​ firm's warehouse capacity. The relevant cash flows for the projects are shown in the following​ table:

LOADING...

. The​ firm's cost of capital is

1212​%.

a.  Calculate the IRR for each of the projects. Assess the acceptability of each project on the basis of the IRRs.

b.  Which project is​ preferred?

Initial investment

500000

320000

Year

1

130000

130000

2

130000

100000

3

170000

105000

4

180000

80000

5

250000

50000
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