A Firm Evaluates All of Its Projects by Applying the IRR

question 89

Multiple Choice

A firm evaluates all of its projects by applying the IRR rule. The current proposed project has cash flows of -$37,048, $16,850, $15,700, and $19,300 for Years 0 to 3, respectively. The required return is 18 percent. What is the project IRR? Should the project be accepted or rejected?

• A) 18.42 percent; accept
• B) 16.05 percent; accept
• C) 16.05 percent; reject
• D) 18.42 percent; reject
• E) 21.08 percent; reject

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Definitions:

Repeated Role-play

The continuous practice of acting out roles in a controlled setting to improve skills, behaviors, or emotional responses.

Perceptual Responses

Reactions or interpretations based on the perception of stimuli, including how individuals see, hear, feel, taste, or smell various inputs.

Modification of Perceptions

The process of changing how one interprets or views situations, events, or stimuli, often to reduce stress or negative emotions.

Cognitive Modeling

A method in cognitive therapy where the therapist demonstrates a healthier way of thinking in order to teach the client.