Fehr Company is considering two capital investment proposals. Estimates regarding each project are provided below: The company requires a 10% rate of return on all new investments.
The internal rate of return for Project Gray is approximately

Question

Fehr Company is considering two capital investment proposals. Estimates regarding each project are provided below:  The company requires a 10% rate of return on all new investments. 
The internal rate of return for Project Gray is approximately

Quizplus · Accepted Answer

Project Gray has an internal rate of return of approximately 11%, which is greater than the required rate of return of 10%. Project Beige has an internal rate of return of approximately 9.7%, which is lower than the required rate of return. Therefore, Project Gray is the best choice.

Fehr Company Is Considering Two Capital Investment Proposals