10.

MC Qu. 63 Lucie is reviewing a project with...

Lucie is reviewing a project with an initial cost of $38,700 and cash inflows of $9,800, $16,400, and $21,700 for Years 1 to 3, respectively. Should the project be accepted if it has been assigned a required return of 9.75 percent? Why or why not?

a) yes; because the IRR exceeds the required return by .34 percent

b) yes; because the IRR is less than the required return by .28 percent

c) yes; because the IRR is exceeds the required return by .46 percent

d) no; because the IRR exceeds the required return by .43 percent

e) no; because the IRR is only 9.69 percent