(Answered) Exercise 26-7 iggy company is considering three capital

Accounting

Exercise 26-7 Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows.

Project	Investment	Annual Income	Life of Project
22A	$240,400		$16,700	6 years
23A	273,200		20,740	9 years
24A	281,300		15,700	7 years

Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Iggy Company uses the straight-line method of depreciation.

Click here to view PV table.

(a) Determine the internal rate of return for each project. (Round answers 0 decimal places, e.g. 10. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

Project Internal Rate of Return
22A %
23A %
24A %

b) If Iggy Company's required rate of return is 11%, which projects are acceptable?

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