Question: Howell Petroleum Inc., is trying to evaluate a generation project with the following cash flows: Year 0 -$39000000 Year 1 $57000000 Year 2 $-$9000000 a.

Howell Petroleum Inc., is trying to evaluate a generation project with the following cash flows:

Year 0 -$39000000

Year 1 $57000000

Year 2 $-$9000000

a. If the company requires a return of 10 percent on its investments, should it accept this project? why? What is the NPV?

b. Compute the IRR for this project. How many IRR's are there? If you apply the IRR decision rule, should you accept this project or not? What's going on here?

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