3. The case of multiple internal rate of return. Global Industrial Company has an investment project...

Transcribed Image Text:

3. The case of multiple internal rate of return. Global Industrial Company has an investment project with the following cash flows: Year End Now 1 2 Cash Flow -$200 600 -400 Type of Cash Flow Purchase of equipment Cash earnings from project Cash earnings from project less cleanup costs What is the net present value of these cash flows at 0, 25, 50, and 100 per cent discount rates? a. b. What is the internal rate of return of this project? C. Under what conditions should the project be accepted? 3. The case of multiple internal rate of return. Global Industrial Company has an investment project with the following cash flows: Year End Now 1 2 Cash Flow -$200 600 -400 Type of Cash Flow Purchase of equipment Cash earnings from project Cash earnings from project less cleanup costs What is the net present value of these cash flows at 0, 25, 50, and 100 per cent discount rates? a. b. What is the internal rate of return of this project? C. Under what conditions should the project be accepted?