Question
A firm evaluates all of its projects by applying the IRR rule. If the required return is 16%, should the firm accept the following project?
A firm evaluates all of its projects by applying the IRR rule. If the required return is 16%, should the firm accept the following project?
Year Cash Flow
0 -$34,000
1 16,000
2 18,000
3 15,000
I know that:
0 = $34,000 + $16,000/(1+IRR) + $18,000/(1+IRR)^2+ $15,000/(1+IRR)^3
My question is: What does IRR equal as the answer is IRR= 20.97%
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Economics And Personal Finance
Authors: Irvin Tucker, Joan Ryan
1st Edition
1133562108, 978-1133562108
