YEAR CASH FLOW

0 -31,000

1 26,000

2 9,000

Company R is considering a new toy that will produce the following cash flows. Should the company produce this toy if the firm requires a 15 percent rate of return?

A.Yes; the project's rate of return is 10.21 percent

B.Yes; the project's rate of return is 11.47 percent

C.No; the project's rate of return is 10.21 percent

D.No; the project's rate of return is 11.47 percent

E.No; the internal rate of return is zero percent