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You have 3 projects with the following cash flows: Year Project 1 - $150 $20 Project 2 -823 Project 22 40 2 $41 0 59

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You have 3 projects with the following cash flows: Year Project 1 - $150 $20 Project 2 -823 Project 22 40 2 $41 0 59 3 $60 7.006 79 $79 -6.496 -246 a. For which of these projects is the IRR rue reliable? b. Estimate the IRR for each project to the nearest 1%). c. What is the NPV of each project the cost of capital is 5%? 20% 50%? a. For which of these projects is the IRR rule reliable? (Select from the drop-down menus) The IRR rule is reliable for Unless all of the cash flows of the project precede the multiple IRRs or the IRR may not exist ones, the IRR rule may give the wrong answer and should not be used. Furthermore, there may be

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