Simms Corp A $12.55 \%$ B $13.21 \%$ C $13.87 \%$ D $14.56 \%$

question 52

Short Answer

Simms Corp. 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 or negative, in both cases it will be rejected. $\begin{array}{c}\begin{array}{lll} \text {Year}\\\text {Cash flows}\end{array}\begin{array}{lll} 0 \\\hline -\$1,000 \end{array}\begin{array}{lll}1 \\\hline \$425\end{array}\begin{array}{lll}2 \\\hline \$425\end{array}\begin{array}{lll}3 \\\hline \$425\end{array}\end{array}$


a. $12.55 \%$
b. $13.21 \%$
c. $13.87 \%$
d. $14.56 \%$
e. $15.29 \%$

---

Definitions:

Systematic Desensitization

A behavior therapy technique aimed at reducing phobic or anxiety responses through gradual exposure to the feared object or situation paired with relaxation exercises.

Relaxation Response

A physical state of deep rest that is the opposite of the stress response, which can be induced through practices like meditation, deep breathing, or yoga.

Feared Stimulus

An object, situation, or event that triggers a strong fear response in an individual, often leading to avoidant behavior.

Contingency Management

A behavior modification technique that reinforces desirable behaviors with rewards and sometimes punishes undesirable behaviors to promote behavior change.