Question: please post explanation Question 20. A company is evaluating a project which has an Internal Rate of Return of 9%. Inflation is running at 8%
Question 20. A company is evaluating a project which has an Internal Rate of Return of 9%. Inflation is running at 8% per annum and the weighted average cost of capital is 14%. Should the company invest in the project? (a) Yes (b) No JRR =9% Infl. = 8% (c) Maybe, if inflation falls to 1% per annum WAL=14% (d) Maybe, if the weighted average cost of capital falls to 11% (e) Unsure
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