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Q1-RK wants to invest $100.00 in a project. RK's required return is 39% on a $100.00 investment. The expected Cash Flows in each of the
Q1-RK wants to invest $100.00 in a project. RK's required return is 39% on a $100.00 investment. The expected Cash Flows in each of the four years of the proposed investment are given in Table 1 below. Please make sure you indicate all your work. Otherwise, no credit will be given. Year CF 1 2 $0.00 $0.00 $100.00 $150.00 3 4 Table 1: Table I 1. What is the estimated IRR? (5 pts.) 2. What advise would you give RK regarding the desirability of investing in the above project? (5 pts.)
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