Billabong tech uses the internal rate of return (irr) to select projects. calculate the irr for each of the following projects and recommend the best project based on this measure. project t-shirt requires an initial investment of $16 comma 333 and generates cash inflows of $6 comma 500 per year for 5 years. project board shorts requires an initial investment of $27 comma 000 and produces cash inflows of $10 comma 500 per year for 6 years.

You are the manager of a large crude-oil refinery. as part of the refining process, a certain heat exchanger (operated at high temperatures and with abrasive material flowing through it) must be replaced every year. the replacement and downtime cost in the first year is $165 comma 000. this cost is expected to increase due to inflation at a rate of 7% per year for six years (i.e. until the eoy 7), at which time this particular heat exchanger will no longer be needed. if the company's cost of capital is 15% per year, how much could you afford to spend for a higher quality heat exchanger so that these annual replacement and downtime costs could be eliminated?