Question: Evaluate the following project using the internal rate of return (IRR) method. If the opportunity cost of capital is 10%, what should you do and

Evaluate the following project using the internal rate of return (IRR) method. If the opportunity cost of capital is 10%, what should you do and why?

Initial Cost $6,000
End of Year 1 $3,300
End of Year 2 $3,600

Answer Choices

a. reject; because the opportunity cost exceeds the IRR

b. accept; because the IRR exceeds the opportunity cost

c. accept; because the opportunity cost exceeds the IRR

d. reject; because the IRR exceeds the opportunity cost

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