Exercise A Algo Using the internal rate of return to compare investment opportunities LO
Velma and Keota V&K is a partnership that is considering two alternative Investment opportunitles. The first Investment opportunity
will have a threeyear useful life, will cost $ and will generate expected cash Inflows of $ per year. The second
Investment is expected to have a useful Iffe of five years, will cost $ and will generate expected cash Inflows of $ per
year. Assume that V&K has the funds avallable to accept only one of the opportunitles. PV of $ and PVA of $
Note: Use approprlate factors 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?
