Question
Calculate the IRR for each project below, and considering that the required rate of return is 14%, determine if the projects should be accepted.
Calculate the IRR for each project below, and considering that the required rate of return is 14%, determine if the projects should be accepted. Project B Year Project C 0 Project A Project D Cash Flow Cash Flow Cash Flow Cash Flow -$40,000.00 -$35,000.00 -$42,000.00 -$39,000.00 $18,000.00 $19,000.00 $20,000.00 $25,000.00 2 $25,000.00 $23,000.00 $23,000.00 $12,000.00 3 $14,000.00 $13,000.00 $15,000.00 $14,000.00 $7,000.00 $5,000.00 $7,000.00 $25,000.00 1 4 For the cash flows above, calculate the NPV's and use the NPV rule to make a decision if the projects should be accepted or not. At a required rate of return of 12% should the projects be accepted? What if this rate was 8%?
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
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