Shale Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash
Question:
Shale Petroleum, Inc., is trying to evaluate a generation project with the following cash flows:
Year Cash flow
0 ...................-$25,000,000
1 ..................... 51,000,000
2 ...................... -9,000,000
(a) If the company requires a 10 percent return on its investments, should it accept this project? Why?
(b) Compute the IRR for this project. How many IRRs are there? If you apply the IRR decision rule, should you accept the project or not? What’s going on here?
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Step by Step Answer:
a The equation for the NPV of the project is NPV 25000000 5100000...View the full answer
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Related Book For 
Essentials Of Corporate Finance
ISBN: 9780073405131
6th Edition
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan
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