The Flour Baker Is Considering a Project with the Following

question 22

Multiple Choice

The Flour Baker is considering a project with the following cash flows.Should this project be accepted based on its internal rate of return if the required return is 18 percent? $$\begin{array} { | c | r | } \hline \text { Year } & \text { Cash Flow } \\\hline 0 & - \$ 49,000 \\\hline 1 & 9,500 \\\hline 2 & 26,200 \\\hline 3 & 38,700 \\\hline\end{array}$$

• A)Yes; because the project's rate of return is 7.78 percent
• B)Yes; because the project's rate of return is 16.08 percent
• C)Yes; because the project's rate of return is 19.47 percent
• D)No; because the project's rate of return is 19.47 percent
• E)No; because the project's rate of return is 16.08 percent

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