Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year
Question:
Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows:
Year Cash Flow
0-$39,000,000
1 63,000,000
2 -12,000,000
a. If the company requires a 12 percent return on its investments, should it accept this project? Why?
b. Compute the IRR for this project. How many IRRs are there? Using the IRR decision rule, should the company accept the project? What’s going on here?
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Input area Annual cash flows Year 0 39000000 Year 1 63000000 Year 2 12000000 Required re...View the full answer
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Related Book For 
Fundamentals of corporate finance
ISBN: 978-0078034633
10th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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