Consider a Project with the Following Cash Flows

question 48

Multiple Choice

Consider a project with the following cash flows. What's the IRR of the project? If a firm's cost of capital is 15%,should the firm accept the project?

• A) 50%; accept the project
• B) 12.5%; reject the project
• C) 12.5% and 50%; accept the project
• D) 12.5%,and 50%; reject the project

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Definitions:

Prioritize

To arrange or deal with in order of importance.

Paraphrase

Verbal summary of the key ideas of your partner’s message that helps you check the accuracy of your understanding.

Polarization

The process or phenomenon by which opinions, attitudes, or behaviors become more extreme or divided among members of a group or society.

Static Evaluation

The tendency to view people or situations as unchanging, ignoring the dynamic nature of reality.