Question: Compute the IRR for Project X and note whether the firm should accept or reject the project with the cash flows shown as follows if

Compute the IRR for Project X and note whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 9 percent.

Time: 0 1 2 3 4 5
Cash flow: 1,000 75 100 100 0 2,000

Multiple Choice

  • 16.61 percent, reject

  • 9 percent, accept

  • 16.61 percent, accept

  • 9 percent, reject

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