Apple is considering two mutually exclusive projects. The required rate of return on this project is 10%. The two projects provide the following information:
Project A
Project B
Initial Outlay
(RM500,000)
Inflow year 1
RM120,000
RM160,000
Inflow year 2
RM110,000
Inflow year 3
RM130,000
Inflow year 4
RM180,000
d. Calculate the internal rate of return (IRR) for project B, Given the IRR for project A is 6%
e. Based on your answer in (a) to (d), which project should be accepted? Explain your decision.
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