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A firm is considering a project that requires an initial investment of $250,000. The life of this project is five years. Cash flows for each
A firm is considering a project that requires an initial investment of $250,000. The life of this project is five years. Cash flows for each year are estimated as follows: Year 1 Year 2 Year 3 Year 4 Year 5 $120,000 $220,000 $160,000 -$90,000 -$163,000 The cost of capital of this project is 7%. Calculate the internal rate of return of the project and make a decision. Accept since the IRR is 7.12%, which is greater than the required rate. Accept since the IRR is 3.62%, which is less than the required rate. Reject since the IRR is 7.12%, which is greater than the required rate. Cannot be determined. Reject since the IRR is 3.62%, which is less than the required rate
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