Assume the following for a project under evaluation:

** The project's life is 4 years.

** The total time zero, initial cost of $50,000.

** The total net operating cash flow each year is $15,000.

** In addition to the terminal year operating cash flow, there is a non-operating, terminal year cash flow of $8,000.

What is the project's IRR? Accept or reject the project? Again, assume the cost of capital for a project of this risk is 7%.

Options:

		6%, reject
		7%, indifferent whether to accept or reject
		8.4%, accept
		12.6% accept
		13.3%