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What is the IRR of the project? % (Round to two decimal places.) At what adjusted WACCS will the company accept this project? (Select the best response.) O A. The company will accept this project if the adjusted WACC is greater than the IRR calculated above. O B. The company will accept this project if the adjusted WACCC is no more than the IRR calculated above.

What is the IRR of the project? % (Round to two decimal places.) At what adjusted WACCS will the company accept this project? (Select the best response.) O A. The company will accept this project if the adjusted WACC is greater than the IRR calculated above. O B. The company will accept this project if the adjusted WACCC is no more than the IRR calculated above.

Essentials Of Investments
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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Chapter 11, Question 4

Apply WACC in IRR. Leeward Sailboats is reviewing the following new boat line: Click on the Icon a in order to copy its content into a spreadsheet. Category To T1 T2 T3 Investment - $9,127,216 Net working capital change Operating cash flow Salvage - $720,000 $720,000 $4,231,000 $2,814,000 $3,492,000 $685,000 At what adjusted WACCS will the company accept this project? Hint: Find the IRR of the project, and use it as the maximum adjusted WACC for accepting the project. What is the IRR of the project? % (Round to two decimal places.) At what adjusted WACCS will the company accept this project? (Select the best response.) O A. The company will accept this project if the adjusted WACC is greater than the IRR calculated above. O B. The company will accept this project if the adjusted WACC is no more than the IRR calculated above.
Transcribed Image Text:Apply WACC in IRR. Leeward Sailboats is reviewing the following new boat line: Click on the Icon a in order to copy its content into a spreadsheet. Category To T1 T2 T3 Investment - $9,127,216 Net working capital change Operating cash flow Salvage - $720,000 $720,000 $4,231,000 $2,814,000 $3,492,000 $685,000 At what adjusted WACCS will the company accept this project? Hint: Find the IRR of the project, and use it as the maximum adjusted WACC for accepting the project. What is the IRR of the project? % (Round to two decimal places.) At what adjusted WACCS will the company accept this project? (Select the best response.) O A. The company will accept this project if the adjusted WACC is greater than the IRR calculated above. O B. The company will accept this project if the adjusted WACC is no more than the IRR calculated above.
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