Scotch can expand a successful manufacturing line for an immediate investment of $85 million. The company anticipates

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Question:

Scotch can expand a successful manufacturing line for an immediate investment of $85 million. The company anticipates that the project will generate a cash flow of $172 million in 10 years (and only in that one year). The company considers the required rate of return of the project to be 10.35%

PART 1. Calculate the project's internal rate of return: %

Place your answer in PERCENTAGE form with two decimal places of accuracy. For example, if your answer is thirteen point seventy five percent, then place your answer as 13.75 and NOT as .1375.

PART 2. Given your estimate of the IRR, should Scotch accept or reject the project? Type the word "accept" if you believe they should go ahead with the project or the word "reject" if you believe they should not go ahead with the project.