Wally's Walleyes wants to introduce a new product that has a start-up cost of $7,800. The product has a 2-year life and will provide cash flows of $4,500 in Year 1 and $4,300 in Year 2. The required rate of return is 15 percent. Should the product be introduced? Why or why not?

Multiple Choice

• Yes; the NPV is $635.54.

• Yes; the IRR is 16.32%.

• Yes; the IRR is 12.09%.

• Yes; the NPV is $1,635.54.

• No; the IRR is 8.50%.