Thompson Stores Is Considering a Project That Has the Following

question 74

Multiple Choice

Thompson Stores is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC (and even negative) , in which case it will be rejected. Year: 0 1 2 3 4 5
Cash flows: -$1,000$300 $295 $290 $285 $270

• A) 11.16%
• B) 12.40%
• C) 13.78%
• D) 15.16%

---

Definitions:

Consumption Possibilities

The different combinations of goods and services that a consumer can afford to purchase at given prices with their income level.

Production Possibilities

Represents the various combinations of goods and services that an economy can produce, given its technological capabilities and resources.

Major Exporter

A country or region that sells a large quantity of goods or services to other countries.

Corn

A large grain plant domesticated by indigenous peoples in southern Mexico about 10,000 years ago, widely grown for its edible kernels.