An Investment Has the Following Cash Flows A)yes; Because the IRR Exceeds the Required Return by About

question 100

Multiple Choice

An investment has the following cash flows.Should the project be accepted if it has been assigned a required return of 9.5%? Why or why not?
$\begin{array}{|l|l|}\hline \text { Year } & \text { Cash Flow } \\\hline 0 & -£ 24,000 \\\hline 1 & £ 8,000 \\\hline 2 & £ 12,000 \\\hline 3 & £ 9,000\\\hline\end{array}$

• A)yes; because the IRR exceeds the required return by about 0.39%.
• B)yes; because the IRR is less than the required return by about 3.9%.
• C)yes; because the IRR is positive.
• D)no; because the IRR exceeds the required return by about 3.9%.
• E)no; because the IRR is 9.89%.

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