Question: Consider a project with the following cash flows: C0 = -100, C1 = 200, C2 = -75. (a) Compute the IRR(s) for this project. Hint:

Consider a project with the following cash flows: C0 = -100, C1 = 200, C2 = -75.

(a) Compute the IRR(s) for this project. Hint: use the formula for IRR in the lecture notes and multiply everything by (1+IRR)2 . This gives you a quadratic equation. Now use the quadratic formula (see your high school math notes) to solve this equation for IRR.

(b) Would you accept this project if the opportunity cost of capital is 20%?

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