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A project has cash flows of –$148,400, $42,500, $83,200, and $42,600 for Years 0 to 3,...

A project has cash flows of –$148,400, $42,500, $83,200, and $42,600 for Years 0 to 3, respectively. The required rate of return is 10 percent. Based on the internal rate of return of _____ percent for this project, you should _____ the project.

options:

  • 6.69; accept

  • 11.12; accept

  • 7.48; reject

  • 7.48; accept

  • 6.69; reject

Thank you!!

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Answer #1

Ans 6.69; reject

Reject since IRR is less than required rate of return of 10 percent. Project is acceptable when IRR exceed required rate of return.

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