Please Solve In 10mins Tex Co have correctly calculated the following measures for a new project they wish to implement;Payback 6 years 4 monthsThe Internal Rate of Return IRR is 18%The cost of capital is 15%Which of the following statements is true? The project is acceptable because the IRR is lower than the cost of capitalChooseThe project s not acceptable because the IRR is lower than the cost of capitalDUS ACTIVITYThe project is not acceptable because the payback is less than five yearsThe projee s acceptable because the IRR is greater than the cost ot capitalThe project is areptable because the IRR is lower than the cost of capital

Formula to calculate IRR NPV = Today's value of the expected future cash flows - Today's value…

Answered: Solve In 10m

Business

Accounting

Solve In 10m

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Please Solve In 10mins

Tex Co have correctly calculated the following measures for a new project they wish to implement;
Payback 6 years 4 months
The Internal Rate of Return IRR is 18%
The cost of capital is 15%
Which of the following statements is true? The project is acceptable because the IRR is lower than the cost of capital
Choose
The project s not acceptable because the IRR is lower than the cost of capital
DUS ACTIVITY
The project is not acceptable because the payback is less than five years
The projee s acceptable because the IRR is greater than the cost ot capital
The project is areptable because the IRR is lower than the cost of capital

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