Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and 3.5 years, respectively. Time: 2 3 4 5 Cash flow: -$238,000 $66,100 $84,300 $141,300 $122,300 $81,500 Use the IRR decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) IRR Should it be accepted or reiected?
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and 3.5 years, respectively. Time: 2 3 4 5 Cash flow: -$238,000 $66,100 $84,300 $141,300 $122,300 $81,500 Use the IRR decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) IRR Should it be accepted or reiected?
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 20P
Related questions
Question
![Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of
this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and
3.5 years, respectively.
Time:
1
2
Cash flow:
-$238,000
$66,100
$84,300
$141,300
$122,300
$81,500
Use the IRR decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal
places.)
IRR
%
Should it be accepted or rejected?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F53ad35f8-a0d0-48a5-a69b-1dd1b21d3221%2F346a94c6-472a-4db3-9bba-31561a28ea2b%2Fg62z05_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of
this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and
3.5 years, respectively.
Time:
1
2
Cash flow:
-$238,000
$66,100
$84,300
$141,300
$122,300
$81,500
Use the IRR decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal
places.)
IRR
%
Should it be accepted or rejected?
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