Consider a capital expenditure project to purchase and install new equipment with an ini cash outlay of $19,000. The project is expected to generate net after-tax cash flows each year of $1,100 for five years, and at the end of the project, a one-time after-tax cash flow of $2,500 is expected. The firm has a weighted average cost of capital of 10 percent and requires a 5- year payback on projects of this type. Determine whether this project should be accepted or rejected using IRR.

OPTIONS

-Accept since IRR is 30.86 percent and is greater than 0 percent

-Accept since IRR is 20.09 percent and is greater than 10 percent

-Accept since IRR Is 20.09 percent is is greater than 0 percent

-Reject since IRR is -30.86 and is less than 10 percent

-Reject since IRR IS -20.09 percent and is less than 10 percent