Question
Teddy Bear Planet Inc. has a project with the following cash flows: Year Cash Flows ($) 0 -$ 13,500 1 6,500 2 5,000 3 4,000
Teddy Bear Planet Inc. has a project with the following cash flows:
| Year | Cash Flows ($) | |
| 0 | -$ | 13,500 |
| 1 | 6,500 | |
| 2 | 5,000 | |
| 3 | 4,000 | |
a. Calculate the IRR. (Do not round intermediate calculations and round the answer to 2 decimal places.)
IRR _________ %
b. If the appropriate interest rate is 8 percent, should the company accept the project?
multiple choice
-
Yes
-
No
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Asset Pricing
Authors: John Cochrane
1st Edition
0691121370,1400829135
