What is the IRR of Project X? ( Do not round intermediate calculations. Enter yo

Question

What is the IRR of Project X? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places

What is the IRR of Project Y? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places

What is the crossover rate for these two projects? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places

Year Cash Flow (X) Cash Flow (Y) 0 ?$19,000        ?$19,000        1 10,800        6,840        2 8,630        9,410        3 5,210    9,300   

Explanation / Answer

IRR of Project X = 16.22%

IRR of project Y = 15.54%

Cross over rate = IRR of incremental CF = 11.95%

Year CF(X) CF(Y) Incremental CF 0 -19000 -19000 0 1 10800 6840 -3960 2 8630 9410 780 3 5210 9300 4090 IRR 16.22% 15.54% 11.95%

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