Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year

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Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows:

Year _____________Cash Flow

0 .................... -$45,000,000

1 ...................... 78,000,000

2 ..................... -14,000,000

a. If the company requires a 12 percent return on its investments, should it accept this project? Why?

b. Compute the IRR for this project. How many IRRs are there? Using the IRR decision rule, should the company accept the project? What's going on here?

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Fundamentals of corporate finance

ISBN: 978-0073382395

9th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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Question Posted: Dec 16, 2016 01:52 PM

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Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year

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Fundamentals of corporate finance

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