question archive Management of Blossom Automotive, a manufacturer of auto parts, is considering investing in two projects
Management of Blossom Automotive, a manufacturer of auto parts, is considering investing in two projects
Subject:FinancePrice: Bought3
Management of Blossom Automotive, a manufacturer of auto parts, is considering investing in two projects. The company typically compares project returns to a cost of funds of 17.00 percent.
| Year | Project 1 | Project 2 | ||||
| 0 | - $463,683 | - $544,890 | ||||
| 1 | 276,000 | 126,750 | ||||
| 2 | 107,000 | 197,170 | ||||
| 3 | 120,500 | 222,700 | ||||
| 4 | 134,000 | 288,050 | ||||
Compute the IRRs based on the cash flows. Which project(s) will be accepted? (Round final answer to 2 decimal places, e.g. 15.25%.)
| The IRR of project 1 is % and the project should be rejected accepted. |
| The IRR of project 2 is % and the project should be accepted rejected. |
