Question
A project has an initial cash inflow of $87,700 and cash flows of $48,700 in Year 1 and $57,200 in Year 2. The discount rate
A project has an initial cash inflow of $87,700 and cash flows of $48,700 in Year 1 and $57,200 in Year 2. The discount rate is 14 percent. Should this project be accepted or rejected based on IRR? Why?
Accepted, because this is a financing project and the IRR is less than the discount rate.
Rejected, because this is an investing project and the IRR is less than the discount rate.
Accepted, because this is a financing project and the IRR is greater than the discount rate.
Rejected, because this is an investing project and the IRR is greater than the discount rate.
Accepted, because the IRR equals the discount rate.
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Valuation, Measuring And Managing The Value Of Companies
Authors: Tim Koller, Marc Goedhart, David Wessels
7th Edition
1119611865, 9781119611868
