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Consider a domestic firm with the following cash flows: Item Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 $ Cash Inflows

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Consider a domestic firm with the following cash flows: Item Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 $ Cash Inflows 1,000 7,000 9,000 18,000 20,000 $ Cash Outflows 23,000 3,000 1,000 1,500 2,000 5,000 Given a weighted average cost of capital (WACC) of 18%, this project would be rejected, because the IRR is equal to 14.33% and less than the WACC rejected, because the IRR is equal to 16.66% and less than the WACC accepted, because the IRR is positive and equal to 14.33% accepted, because the IRR is positive and equal to 16.66%

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