The idea is that if the discount rate is greater than the IRR, the company will not

Question:

The idea is that if the discount rate is greater than the IRR, the company will not pursue the project; whereas if the discount rate is less than the IRR, the project is financially attractive.

a. Use Excel’s Goal Seek tool to find the IRR for the Acron model.

b. Excel also has an IRR function. Look it up in online help to see how it works, and then use it on Acron’s model. Of course, you should get the same IRR as in part a.

c. Verify that the NPV is negative when the discount rate is slightly greater than the IRR, and that it’s positive when the discount rate is slightly less than the IRR.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Practical Management Science, Revised

ISBN: 9781118373439

3rd Edition

Authors: Wayne L Winston, S. Christian Albright

Question Posted: