company is trying to evaluate the following project based on IRR (Internal rate of return). Opportunity cost
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Question:
company is trying to evaluate the following project based on IRR (Internal rate of return). Opportunity cost of capital is 10%. Which one of the decisions listed below is correct?
Years | Project Cash Flows |
0 | -6,000 |
1 | 3,300 |
2 | 3,300 |
a.
Accept, since opportunity cost exceeds IRR
b.
Accept, since IRR exceeds opportunity cost
c.
Reject, since opportunity cost exceeds IRR
d.
Reject, since IRR exceeds opportunity cost
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