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

question 19

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 three and a half and four and a half years,respectively.Use the MIRR decision to evaluate this project; should it be accepted or rejected?

• A)MIRR = 13.59 percent; accept the project
• B)MIRR = 7.96 percent; reject the project
• C)MIRR = 7.19 percent; reject the project
• D)MIRR = 12.58 percent; accept the project

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