Marites Company is considering a 5-year project. The company plans to invest P900,000 now and it forecasts cash flows for each year of P270,000. The company requires that investments yield a discount rate of at least 14%. Calculate the internal rate of return to determine whether it should accept this project. Group of answer choices A. The project should be rejected because it will not earn exactly 14%. B. The project should be rejected because it will earn less than 14%. C. The project should be accepted because it will earn more than 10%. D. The project will earn more than 12% but less than 14%. At a hurdle rate of 14%, the project should be rejected. E. The project should be accepted because it will earn more than 14%.
Marites Company is considering a 5-year project. The company plans to invest P900,000 now and it forecasts cash flows for each year of P270,000. The company requires that investments yield a discount rate of at least 14%. Calculate the internal rate of return to determine whether it should accept this project. Group of answer choices A. The project should be rejected because it will not earn exactly 14%. B. The project should be rejected because it will earn less than 14%. C. The project should be accepted because it will earn more than 10%. D. The project will earn more than 12% but less than 14%. At a hurdle rate of 14%, the project should be rejected. E. The project should be accepted because it will earn more than 14%.
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
Section: Chapter Questions
Problem 1PS
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Marites Company is considering a 5-year project. The company plans to invest P900,000 now and it
Calculate the
Group of answer choices
A. The project should be rejected because it will not earn exactly 14%.
B. The project should be rejected because it will earn less than 14%.
C. The project should be accepted because it will earn more than 10%.
D. The project will earn more than 12% but less than 14%. At a hurdle rate of 14%, the project should be rejected.
E. The project should be accepted because it will earn more than 14%.
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