A project requires $12,500 initial investment. Cash flows are estimated as $2,500 for the first two...

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A project requires $12,500 initial investment. Cash flows are estimated as $2,500 for the first two years and $3,100 a year for the next three years. The discount rate is 11.25%. NPV for this project is negative. Is internal rate of return (IRR) less than or more than the discount rate? In the answer box, enter 1 if it is less than discount rate. Enter 2 if it is more than the discount rate. A project requires $12,500 initial investment. Cash flows are estimated as $2,500 for the first two years and $3,100 a year for the next three years. The discount rate is 11.25%. NPV for this project is negative. Is internal rate of return (IRR) less than or more than the discount rate? In the answer box, enter 1 if it is less than discount rate. Enter 2 if it is more than the discount rate.

Answer rating: 100% (QA)

To determine whether the internal rate of return IRR is less than or gr... View the full answer