Your company has a project available with the following cash flows: Year 912345 Cash Flow -$ 81,100 21,500 25,000 30,800 26,000 19,800 If the required return is 14 percent, should the project be accepted based on the IRR?
Your company has a project available with the following cash flows: Year 912345 Cash Flow -$ 81,100 21,500 25,000 30,800 26,000 19,800 If the required return is 14 percent, should the project be accepted based on the IRR?
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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Question
Your company has a project available with the following cash flows :
If the required return is 14 percent should the project be accepted based on IRR ?
Transcribed Image Text:Your company has a project available with the following cash flows:
| Year | Cash Flow |
|------|------------|
| 0 | -$81,100 |
| 1 | $21,500 |
| 2 | $25,000 |
| 3 | $30,800 |
| 4 | $26,000 |
| 5 | $19,800 |
If the required return is 14 percent, should the project be accepted based on the IRR?
**Multiple Choice:**
- ○ Yes, because the IRR is 17.07 percent.
Transcribed Image Text:- ○ Yes, because the IRR is 17.07 percent.
- ○ No, because the IRR is 17.07 percent.
- ○ No, because the IRR is 15.75 percent.
- ○ Yes, because the IRR is 16.41 percent.
- ○ Yes, because the IRR is 15.75 percent.
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