Assume the following for a project under evaluation:

The

project's life is 4 years.

The

total time zero, initial cost of $55,000.

The

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

In

addition to the terminal year operating cash flow,

there is a nonoperating,

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%.

7% indifferent to accept or reject

8.4% reject

8.4% accept

15.75%, reject

15.75%: accept