A 5-year project with a $300,000 initial investment has an IRR of 18%.  

1. What can you say about the NPV of the project if the required return is 14%, and why? 

2.Explain in your own words what the 18% IRR means.  

3. Then, assuming the project generates an annuity cash flow (i.e., a constant dollar amount each year), complete this sentence that begins with "If my company takes the project and invest $300,000 now, we will be generating....(an amount of positive cash flow per year)"

Answer rating: 100% (QA)

1 If the required rate is less than IRR then the net present value NP... View the full answer