Answer:
1) The IRR of Project X is 10.81%
2) The IRR of Project Y is 10.87%
3) Cross over rate = 9.65%
Explanation:
1) 0 = -$ 15,600 + 6,740/[1+IRR] + 7,320/[1+IRR]^2 + 4,840/[1+IRR]^3
IRR = 10.81%
Therefore, The IRR of Project X is 10.81%
2) 0 = -$ 15,600 + 7,350/[1+IRR] + 7,700/[1+IRR]^2 + 3,690/[1+IRR]^3
IRR Y = 10.87%
Therefore, The IRR of Project Y is 10.87%
3) Cross over rate = 9.65% i.e the rate at which NPVs are equal
