Question
5.Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of
5.Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are three and three and a half years, respectively.
Time Years01 2 34 5
Cash Flow -100,00030,00045,00055,00030,00010,000
Use the IRR decision rule to evaluate this project; should it be accepted or rejected? Calculate the IRR
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
