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Your restaurant’s new project, creating a gluten-free menu, is expected to have the following cash flows. The company requires a project to have a payback period less than 2 years. The company’s required rate of return is 18%. Year Cash Flows Cumulative cash flows 0 -$850,000   1 $300,000   2 $400,000   3 $500,000   What is the project’s internal rate of return (IRR)? Group of answer choices 15.50% 7.72% 27.95% 17.72%

Your restaurant’s new project, creating a gluten-free menu, is expected to have the following cash flows. The company requires a project to have a payback period less than 2 years. The company’s required rate of return is 18%. Year Cash Flows Cumulative cash flows 0 -$850,000   1 $300,000   2 $400,000   3 $500,000   What is the project’s internal rate of return (IRR)? Group of answer choices 15.50% 7.72% 27.95% 17.72%

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
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29) Your restaurant’s new project, creating a gluten-free menu, is expected to have the following cash flows. The company requires a project to have a payback period less than 2 years. The company’s required rate of return is 18%.

Year Cash Flows Cumulative cash flows

0

-$850,000

  

1

$300,000

  

2

$400,000

  

3

$500,000

  

What is the project’s internal rate of return (IRR)?

Group of answer choices
15.50%
7.72%
27.95%
17.72%
 
 
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