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You are evaluating a new potential project. You compute its projected internal rate of return (IRR), which equals 15%. The required rate of return for
You are evaluating a new potential project. You compute its projected internal rate of return (IRR), which equals 15%. The required rate of return for similarly risky projects is 12%. You now learn that the R&D costs for the project, which were incurred over the previous year, equal $500K. With those costs included, the IRR for the project would be 10%. Should you proceed with the project? Explain your reasoning
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