q15

Consider a capital expenditure project to purchase and install new equipment with an initial cash outlay of 527.000 the project is expected to generate net after-tax cash flows each year of $5,700 for six vears, and at the end of the runtit. one-time after-tax cash flow of $9,000 is expected. The firm has a weighted average cost of capital of 11 percent and requires a 4-year payback on projects of this type. Determine whether this project should be accepted or rejected wiry IRR. Befiect since IRR is -17.88 percent and is less than 0 percent Accept since itor is 2342 percent and is sreater thin 0 percent Accept since IFR is 13.13 percent and is greater than 11 percent Accept thice the to 29 , 42 percent and is preater than 11 percent Refwat whe toh is 123 , 2 percent and is less than 11 percent