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Consider a project with an immediate investment of 11,000 , cash flows of 7,500 at the end of each year for four years, and a
Consider a project with an immediate investment of 11,000 , cash flows of 7,500 at the end of each year for four years, and a cash flow off 20,000 at the end of year five. NPV profile analysis indicates that the project has two Internal Rates of Return (IRRs) at 5.62% and 27.78%. Given a weighted average cost of capital (WACC) of 10% which of the following statements is correct? Project should be rejected because one of the IRRs is lower than the WACC. Project should be accepted because at least on of the IRRs is reater than the WACC. Project should be accepted because it has a positive NPV. Unable to make decision because of the non-normal cash flows
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