Question
A firm evaluates the new project and it has the following cash flows: Year 0 1 2 3 4 Cash Flows -$18,000 $4,230 $6,990 $7,200
A firm evaluates the new project and it has the following cash flows:
| Year | 0 | 1 | 2 | 3 | 4 |
| Cash Flows | -$18,000 | $4,230 | $6,990 | $7,200 | $9,330 |
a. Using IRR, should the firm accept this project if the required return is 10%?
b. What is the NPV at a discount rate of zero percent? What is the NPV at a required return of 21%? Should the firm accept this project?
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Financial Management Theory And Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
10th Edition
0030329922, 9780030329920
