2. 14.

Problems with IRR [LO 9.5] Bargo Apples Ltd is trying to evaluate a generation project with the following cash flows:

2 − 13 000 000 1. 1. If the company requires a return of 12 per cent on its investments, should it accept this project? Why?
2. Compute the IRR for this project. How many IRRs are there?
Using the IRR decision rule, should the company accept the project? What is going on here?

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Year Cash flow 0 -$48 000 000 1 71 000 000