Following is information on two alternative investments. Beachside Resort is considering building a new pool...
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Accounting
Following is information on two alternative investments. Beachside Resort is considering building a new pool or spa. The company requires a 9% return from its investments.
Pool
Spa
Initial investment
$ (175,000)
$ (120,000)
Net cash flows in:
Year 1
41,500
33,500
Year 2
57,500
51,500
Year 3
81,795
67,500
Year 4
91,900
73,500
Year 5
66,500
25,500
Compute the internal rate of return for each of the projects using excel functions. (Round your answers to 2 decimal places.)
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