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Tressor Company Is Considering a 5-Year Project

question 156

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Tressor Company is considering a 5-year project.The company plans to invest $90,000 now and it forecasts cash flows for each year of $27,000.The company requires that investments yield a discount rate of at least 14%.Selected factors for a present value of an annuity of $1 for five years are shown below: Tressor Company is considering a 5-year project.The company plans to invest $90,000 now and it forecasts cash flows for each year of $27,000.The company requires that investments yield a discount rate of at least 14%.Selected factors for a present value of an annuity of $1 for five years are shown below:   Calculate the internal rate of return to determine whether it should accept this project. A) The project should be accepted because it will earn more than 14%. B) The project should be accepted because it will earn more than 10%. C) The project will earn more than 12% but less than 14%.At a hurdle rate of 14%,the project should be rejected. D) The project should be rejected because it will earn less than 14%. E) The project should be rejected because it will not earn exactly 14%. Calculate the internal rate of return to determine whether it should accept this project.

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