Question
Consider a project with the following cash flows and a company that has a cost of Capital of 15%. Year Monetary flows 0 - 20,000
Consider a project with the following cash flows and a company that has a cost of Capital of 15%.
Year Monetary flows
0 - 20,000
1 - 50 000
2 -10,000
A) What are the two IRRs associated with these cash flows?
B) If the cost of capital of the enterprise is between the two IRR values calculated in the (A), should it accept or reject the project?
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Financial Markets And Institutions An Introduction To Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett
3rd Edition
0073250937, 9780073250939
