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Question: Velma and Keota (V&K) is a


Velma and Keota (V&K) is a partnership that is considering two alternative investment opportunities. The first investment opportunity will have a five-year useful life, will cost $19,680.96, and will generate expected cash inflows of $4,800 per year. The second investment is expected to have a useful life of three years, will cost $12,885.48, and will generate expected cash inflows of $5,000 per year. Assume that V&K has the funds available to accept only one of the opportunities.
Required
1. Calculate the internal rate of return of each investment opportunity.
2. Based on the internal rates of return, which opportunity should V&K select?
3. Discuss other factors that V&K should consider in the investment decision.



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> Indicate whether each of the following variances is favorable or unfavorable. The first one has been done as an example.

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> How does product costing used in financial accounting differ from product costing used in managerial accounting?

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