Project Y Has Following Cash Flows: C₀ = -800, C₁

question 6

Multiple Choice

Project Y has following cash flows: C₀ = -800, C₁ = +5,000, and C₂ = -5,000. Calculate the IRRs for the project.

• A)25 percent and 400 percent.
• B)125 percent and 500 percent.
• C)-44 percent and 11.6 percent.
• D)No IRRs exist for this project.

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Definitions:

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where demand and supply are balanced.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in a market balance.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices.

Supply

Supply represents the quantity of goods or services that market participants are willing and able to provide at various price levels, over a specific period of time.