Kiley Electronics Is Considering a Project That Has the Following

question 49

Multiple Choice

Kiley Electronics is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the cost of capital (and even negative) , in which case it will be rejected.

• A) 9.70%
• B) 10.78%
• C) 11.98%
• D) 13.31%
• E) 14.64%

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Definitions:

Cash Flow Growth Rate

The speed at which a firm's cash flow grows within a defined timeframe.

Required Rate

The minimum return that investors expect to earn from an investment to compensate for its risk.

Cash Flow Growth Rate

The rate at which a company's cash flow from operations increases over a given time period.