Suppose Your Firm Is Considering Investing in a Project with the Cash

question 17

Multiple Choice

Suppose your firm is considering investing in a project with the cash flows shown as follows,that the required rate of return on projects of this risk class is 8 percent,and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years,respectively.Use the IRR decision to evaluate this project; should it be accepted or rejected?

• A)IRR = 16.92 percent; accept the project
• B)IRR = 7.123 percent; reject the project
• C)IRR = 18.32 percent; accept the project
• D)IRR = 7.59 percent; reject the project