Problem:
You work for an outdoor play structure manufacturing company and are trying to decide between two projects:
Year End Cash Flows ( $thousands)
Project 0 1 2 IRR
_______________________________
Playhouse -30 15 20 10.4%
Fort -80 39 52 8.6%
You can undertake only one project. If your cost of capitol is 8%, use the incremental IRR rule to make the correct decision.