For the cash flows in the previous problem, suppose the firm uses the NPV decision rule. At

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For the cash flows in the previous problem, suppose the firm uses the NPV decision rule. At a required return of 9 percent, should the firm accept this project? What if the required return was 21 percent?


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A firm evaluates all of its projects by applying the IRR rule. If the required return is 11 percent, should the firm accept the following project?
Year ............Cash Flow
0 .................−$157,300
1 .......................74,000
2 .......................87,000
3 .......................46,000

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Essentials of Corporate Finance

ISBN: 978-1260013955

10th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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