You are analyzing a project and have gathered the following data Year Cash flow 0 $ 175,000 1 $ 47,200 2 $ 86,300 3 $ 46,000 4 $ 40,700 Required payback period 2 5 years Required AAR 7 50 percent Required return 8 50 percent 6 Based on the internal rate of return of percent for this project, you sh...

A1044 accept Years Cash flow DFC 1044 PV ...

You are analyzing a project and have gathered the following data: Year Cash flow 0 ...... -$

Question:

You are analyzing a project and have gathered the following data:
Year Cash flow
0 ...... -$ 175,000
1 ...... $ 47,200
2 ...... $ 86,300
3 ...... $ 46,000
4 ...... $ 40,700

Required 2.5 years
Required AAR 7.50 percent
Required return 8.50 percent

6. Based on the of _____ percent for this project, you should _____ the project. A. 10.44; accept
B. 19.78; accept
C. 8.78; reject
D. 19.78; reject
E. 10.44; reject

Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment... Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...