Question
A project requires $12,500 initial investment. Cash flows are estimated as $2,500 for the first two years and $3,100 a year for the next
A project requires $12,500 initial investment. Cash flows are estimated as $2,500 for the first two years and $3,100 a year for the next three years. The discount rate is 11.25%. NPV for this project is negative. Is internal rate of return (IRR) less than or more than the discount rate? In the answer box, enter 1 if it is less than discount rate. Enter 2 if it is more than the discount rate.
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
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