P2 Internal rate of return. For each of the projects shown in the following table, calculate the internal rate of return (IRR). Then indicate, for each project, the maximum cost of capital that the firm could have and still find the IRR acceptable.
		Project A	Project B	Project C	Project D
	Initial investment (CF0)	-$90,000	-$490,000	-$20,000	-$240,000
	Year	Cash inflows (CFt)
	1	$20,000	$150,000	$7,500	$120,000
	2	25,000	150,000	7,500	100,000
	3	30,000	150,000	7,500	80,000
	4	35,000	150,000	7,500	60,000
	5	40,000		7,500
Answer - fill in the blue boxes below.
	Project A
	CF0			-$90,000
	CF1			$20,000
	CF2			$25,000
	CF3			$30,000
	CF4			$35,000
	CF5			$40,000
	IRR
	If the firms cost of capital is below				the project would be acceptable.
	Project B
	CF0			-$490,000
	CF1			$150,000
	CF2			$150,000
	CF3			$150,000
	CF4			$150,000
	IRR
	If the firms cost of capital is below				the project would be acceptable.
	Project C
	CF0			-$20,000
	CF1			$7,500
	CF2			$7,500
	CF3			$7,500
	CF4			$7,500
	CF5			$7,500
	IRR
	If the firms cost of capital is below				the project would be acceptable.
	Project D
	CF0			-$240,000
	CF1			$120,000
	CF2			$100,000
	CF3			$80,000
	CF4			$60,000
	IRR
	If the firms cost of capital is below				the project would be acceptable.