Internal Rate of Return Analysis
Cooper Corporation must evaluate two capital expenditure proposals. Cooper's hurdle rate is 10%. Data for the two proposals follow
Proposal X Proposal Y
Required investment $120,000 $120,000
Annual after-tax cash inflows 24,000
After-tax cash inflows at the end of years 3,6,9, and 12 72,000
Life of project 12 years 12 years
What is the internal rate of return for Proposal X? For Proposal Y? Use Excel to compute your answers. Round answers to the nearest whole percentage (ex 0.1854 - 1996)
Proposal X ___
ProposalY ___