Question: Johncan, Inc. is considering a project that has an initial outlay or cost of $220,000. The respective future cash inflows from its four-year project for

Johncan, Inc. is considering a project that has an initial outlay or cost of $220,000. The respective future cash inflows from its four-year project for years 1 through 4 are: $50,000, $60,000, $70,000, and $80,000, respectively. Johncan uses the internal rate of return method to evaluate projects. Will Johncan accept the project if its WACC is 12%?

Johncan will not accept this project because its IRR is about 9.74%.

Johncan will not accept this project because its IRR is about 7.63%.

Johncan will not accept this project because its IRR is about 6.50%.

Johncan will not accept this project because its IRR is about 4.66%.

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