Question
3. An investment has the following cash flows and IRR is found at 9.89%. Should the project be accepted if it has been assigned a
3. An investment has the following cash flows and IRR is found at 9.89%. Should the project be accepted if it has been assigned a required rate of return of 8.95%?
| Year | Cash Flow |
| 0 | -$24000 |
| 1 | $8000 |
| 2 | $12000 |
| 3 | $9000 |
A. yes; because the IRR exceeds the required return by 2.1%.
B. yes; because the IRR is positive.
C. yes; because the IRR is larger than the required rate return.
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Probability For Risk Management
Authors: Matthew J. Hassett, Donald G. Stewart
2nd Edition
156698548X, 978-1566985482
