Question
Year Cash Flow 0 -30,000 1 20,000 2 5,000 3 10,000 a) Suppose the firm uses the IRR decision rule. Should the firm accept the
| Year | Cash Flow |
| 0 | -30,000 |
| 1 | 20,000 |
| 2 | 5,000 |
| 3 | 10,000 |
a) Suppose the firm uses the IRR decision rule. Should the firm accept the project if the required return is 8%?
b.)Suppose the firm uses the IRR decision rule. Should the firm accept the project if the required return is 11%?
c.) Suppose the firm uses the NPV decision rule. Should the firm accept the project if the required return is 9%?
d.) Suppose the firm uses the NPV decision rule. Should the firm accept the project if the required return is 22%?
e.) Suppose the firm uses the NPV decision rule. Should the firm accept the project if the required return is 0%?
f.) Suppose the firm uses the PI decision rule. Should the firm accept the project if the required return is 7%?
g.) Suppose the firm uses the PI decision rule. Should the firm accept the project if the required return is 16%?
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
10th edition
77861671, 978-0077861674
