Question: 12. A project has been selected for implementation. The net cash fl ow (NCF) profi le associated with the project is shown below. MARR is

12. A project has been selected for implementation. The net cash fl ow (NCF)

profi le associated with the project is shown below. MARR is 10%/yr.

EOY NCF 0 2$70,000 1 $30,000 2 $30,000 3 $30,000 4 $30,000 5 $30,000 6 $30,000 1 $2,000

a. What is the internal rate of return of this investment?

b. What is the decision rule for judging the attractiveness of investments based on internal rate of return?

c. Is the project economically justifi ed?

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