(Solved):Construct a choice table for interest rates from 0% to 100% for two mutually exclusive…

 

Question

Construct a choice table for interest rates from 0% to 100% for two mutually exclusive alternatives and the do-nothing alternative.

Buy X

Year 0 -$100.0

Years 1-4 $31.5

Buy Y

Year 0 -$50.0

Years 1-4 $16.5

 

EXPERT ANSWER

To calculate IRR of the projects in excel use the steps;

1.Input the cash flows and corresponding years into excel

2.In an empty cell type “=IRR( Highlight the cash flows)”

3.Press Enter

The incremental IRR is calculated using the above steps but the cash

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