Maxwell Feed & Seed Is Considering a Project That Has

question 92

Short Answer

Maxwell Feed & Seed 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. $\begin{array}{c}\begin{array}{lll} \text {Year}\\\text {Cash flows}\end{array}\begin{array}{c} 0 \\\hline -\$9,500\end{array}\begin{array}{c}1 \\\hline \$2,000\end{array}\begin{array}{c}2 \\\hline \$2,025\end{array}\begin{array}{c}3 \\\hline \$2,050\end{array}\begin{array}{c}4 \\\hline \$2,075\end{array}\begin{array}{c}5 \\\hline \$32,100\end{array}\end{array}$

a $2.08 \%$
b. $2.31 \%$
c. $2.57 \%$
d. $2.82 \%$
e. $3.10 \%$

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Definitions:

Freedom

The privilege or liberty to perform actions, express oneself, or form thoughts unhindered and unimpeded.

Freedom

The state of being free or at liberty rather than in confinement or under physical restraint; encompasses the ability to act, speak, or think without externally imposed restrictions.

Slavery

A system in which individuals are owned by others as property, deprived of personal freedom and compelled to perform labor or services.