Compute the IRR for Project X and Note Whether the Firm

question 45

Multiple Choice

Compute the IRR for Project X and note whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 9 percent. $$\begin{array} { | l | c | c | c | c | c | c | } \hline \text { Time: } & 0 & 1 & 2 & 3 & 4 & 5 \\\hline \text { Cash flow: } & - 1,000 & - 75 & 100 & 100 & 0 & 2,000 \\\hline\end{array}$$

• A)9 percent, accept
• B)9 percent, reject
• C)16.61 percent, accept
• D)16.61 percent, reject

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