Marielle Machinery Works forecasts the following cash flows for a project under consideration. It uses the Internal rate of return r accept or reject projects. C Co -$ 10,000 IRR C2 +$ 7,500 a. What is the project's IRR? Note: Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. 22.41 03 +$ 8,500 b. Should this project be accepted if the required return is 12%?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Marielle Machinery Works forecasts the following cash flows for a project under consideration. It uses the Internal rate of return rule to
accept or reject projects.
C₁
Co
-$ 10,000
C₂
+$ 7,500
IRR
a. What is the project's IRR?
Note: Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
C3
+$ 8,500
22.41 %
b. Should this project be accepted if the required return is 12%?
Yes
No
Transcribed Image Text:Marielle Machinery Works forecasts the following cash flows for a project under consideration. It uses the Internal rate of return rule to accept or reject projects. C₁ Co -$ 10,000 C₂ +$ 7,500 IRR a. What is the project's IRR? Note: Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. C3 +$ 8,500 22.41 % b. Should this project be accepted if the required return is 12%? Yes No
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