Question
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.
Time: 0 1 2 3 4 5 6
Cash flow: $6,500 | $1,150 | $2,350 | $1,550 | $1,550 | $1,350 | $1,150 |
Use the IRR decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.)
Should it be accepted or rejected?
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