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Summer Company is considering three capital expenditure projects.

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Summer Company is considering three capital expenditure projects. Relevant data for the projects are as follows.

                 & nbsp;                 Annual          Life of
  &n bsp;       Project          Investment          Income          Project
           22A           $240,000          $15,000          6 years
           23A             270,000           24,400          9 years
           24A             280,000           21,000          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. Summer Company uses the straight-line method of depreciation.

(a) Determine the internal rate of return for each project. Round the internal rate of return factor to three decimals.
(b) If Summer Company’s required rate of return is111%, which projects are acceptable?

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