118 6. DETERMINATION OF PROJECT CASH FLOW 6.9. An investment of $80,000 is projected to generate escalated dollar net revenues (income minus costs) of $10,000 in year 1, $30,000 in year 2, and $40,000...

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Extracted text: 118 6. DETERMINATION OF PROJECT CASH FLOW 6.9. An investment of $80,000 is projected to generate escalated dollar net revenues (income minus costs) of $10,000 in year 1, $30,000 in year 2, and $40,000 in year 3 with a $40,000 salvage value at the end of year 3. (a) Calculate the escalated dollar IRR for an escalated dollar MARR of 20%. Is this an acceptable investment? (b) Calculate the equivalent constant dollar TRR assuming that inflation will be 8% in year 1, 10% in year 2, and 12% in year 3. Is this an acceptable investment?