Accounting for Decision Making and Control 6th Edition by Jerold Zimmerman

Exercise 25

Jasper, Inc., is considering two mutually exclusive investments. Alternative A has a current outlay of $300,000 and returns $100,300 a year for five years. Alternative B has a current outlay of $150,000 and returns $55,783 a year for five years.
Required:
a. Calculate the internal rate of return for each alternative.
b. Which alternative should Jasper take if the required rate of return for similar projects in the capital market is 15 percent