Question
Assume your research determines that the project you are considering has an Initial Cash Outflow (ICF) of $2.2 million and a life of four years.
Assume your research determines that the project you are considering has an Initial Cash Outflow (ICF) of $2.2 million and a life of four years. In addition you have determined that the Operating Cash Flows (OCF) will be $0.8 million each year for three years and then $0.2 million in the final year.
On the risk side, your research has indicated that the Beta of the project is 1.24, while the risk-free rate and Market Risk Premium are 0.8% and 7.1% respectively.
Is this a good investment for your company?
Group of answer choices
Yes, because the Internal Rate of Return is less than the Required Return
Yes, because the Internal Rate of Return is greater than the Required Return
No, because the Internal Rate of Return is less than the Required Return
No, because the Internal Rate of Return is greater than the Required Return
None of the above
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