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Light Sweet Petroleum, Inc., is trying to evaluate an exploration project with the following cash flows: Year Cash Flow 0 -$39,000,000 1 63,000,000 2 -12,000,000
Light Sweet Petroleum, Inc., is trying to evaluate an exploration project with the following cash flows: Year Cash Flow 0 -$39,000,000 1 63,000,000 2 -12,000,000 If the company requires a 12 percent return on its investments, should it accept this project? No, the IRR is above the 12% hurdle rate O Cannot determine because there are multiple IRRs Yes, the IRR is below the 12% hurdle rate Yes, the NPV is positive O No, the NPV is negative
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