S Three Waters Co. is evaluating a proposed capital budgeting project that will require an initial investment of $1,200,000. The project is expected to generate the following net cash flows: Year Net Cash Flow 1 $275,000 2 $400,000 3 $450,000 4 $425,000 Three Waters Co. has been basing capital budgeting decisions on a project's NPV; however, its new CFO wants to start using the internal rate (IRR) method for capital budgeting decisions. The CFO says that the IRR is a better method, because percentages and returns are easier to understand and to compare to required returns. Three Waters Co.'s desired rate of return is 7%. Which of the following is the IRR of the project? O5.80% O 10.32% 11.32% O 128.17% If this is an independent project, the IRR method states that the firm should If the project's desired rate of return decreased bow wou the project. return 4

Three waters Ca. is evaluatiog a proposed capital budgeting project that will require an initial investment of $1,200,000. The project is expected to generate the forioning net caki flows: (ARR) method for capital budprting dechions. The cro surs that the the is a better method, because percentages and returns are easier to understand and to compare to required returns. Three waters Co; desired rate of return in 7x. Which of the following is the whe of the prolect? 3.00% 10 3 we 11328 120.17% If thes is an independert project, the 15R method states that the firm should the preject. Thin tur with inceas: The inat wil decreme. The ter wal net chunge