Problemlithium inc is considering tow mutually exclusive, Ask an Expert

Accounting

Problem:

Lithium Inc is considering tow mutually exclusive projects, A and B. Projects A costs $95,000 and is exprected to generate $65,000 in year one and $75,000 in year 2. Project B costs $120,000 and is expected to generate $64,000 in year one, $67,000 in year two and $56,000 in year three and $45,000 in year four. Lithium Inc. required rate of return for these projects is 10%.

Required:

The modified rate of return for Project A is:

A. 29.63%

B. 24.18%

C. 26. 89%

D. 19.19

Note: Please provide step by step solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91173730

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