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Question

Xanadu Mining is considering three mutually exclusive alternatives as shown in the table below. $MARR$ is 10 percent/year. Based on an internal rate of return analysis, which alternative should be recommended?

$\begin{array}{|c|c|c|c|c|c|} \hline \text { EOY } & 0 & 1 & 2 & 3 & 4 \\ \hline \text { A001 } & -\$ 210 & \$ 80 & \$ 90 & \$ 100 & \$ 110 \\ \hline \text { B002 } & -\$ 110 & \$ 60 & \$ 60 & \$ 60 & \$ 70 \\ \hline \text { C003 } & -\$ 160 & \$ 80 & \$ 80 & \$ 80 & \$ 80 \\ \hline \end{array}$

Solution

VerifiedAnswered 2 years ago

Answered 2 years ago

Step 1

1 of 5## We have the following data:

Xanadu Mining is considering three mutually exclusive alternatives with the following description:

EOY | CF A001($) | CF B002($) | CF C003($) |
---|---|---|---|

0 | -210 | -110 | -160 |

1 | 80 | 60 | 80 |

2 | 90 | 60 | 80 |

3 | 100 | 60 | 80 |

4 | 110 | 70 | 80 |

MARR = 10 percent/year

Required:
$\Rightarrow$ **Recommended alternative based on IRR analysis.**

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