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Exercise 10-10A (Algo) Using the internal rate of return to compare investment opportunities LO 10-3...

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Accounting

Exercise 10-10A (Algo) Using the internal rate of return to compare investment opportunities LO 10-3
Velma and Keota (V&K) is a partnership that is considering two alternative Investment opportunitles. The first Investment opportunity
will have a three-year useful life, will cost $7,162.04, and will generate expected cash Inflows of $3,400 per year. The second
Investment is expected to have a useful Iffe of five years, will cost $11,535.28, and will generate expected cash Inflows of $3,200 per
year. Assume that V&K has the funds avallable to accept only one of the opportunitles. (PV of $1 and PVA of $1)
Note: Use approprlate factor(s) from the tables provided.
Requlred
a. Calculate the Internal rate of return of each Investment opportunity.
Note: Do not round Intermedlate calculations.
b. Based on the internal rates of return, which opportunity should V&K select?
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