You are offered the chance to participate in a project that produces the following cash flows: The

Question:

You are offered the chance to participate in a project that produces the following cash flows:

The internal rate of return is 13.6%. If the opportunity cost of capital is 12%, would you accept the offer? (What is the net present value of the project?)

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... 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... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...