A company is considering 2 product designs. Both products have an economic life of 5 years. Design A requires an investment of $180,000 and is expected to generate an annual cash inflow of $60,000. Design B requires an investment of $210,000 and is expected to generate an annual cash inflow of $70,000. The company requires a rate of return of 12%. What is the IRR of the two product designs?

CAPITAL BUDGETING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A company is considering 2 product designs. Both products have an economic life of 5 years. Design A requires an investment of

A	Design A = 10% and Design B = 12%
B	Design A = 10% and Design B = 20%
C	Design A = 12% and Design B = 12%
D	Design A = 20% and Design B = 20%

Explanation:

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ECONOMICS

COST ACCOUNTING

CAPITAL BUDGETING