Question: solve the best u can top part is the information nedded 2. Internal rate of return (IRR) The internal rate of nhurn (IkR) refers to


2. Internal rate of return (IRR) The internal rate of nhurn (IkR) refers to the compound annual rate of return that a project generates based on its up-front cost and subsequent cash Alws. Consiter the case of Blve Uama Mining Company: Bhe Lama Mining Company is rvaluatiog a proposed capital budgeting project (project Sigma) that wal require an initial investrnent of sin0,000 Bive Lams Mining Compacy has been basing capital budgeting decisions on a project's Npry; however, Itt new CFO wants to start using the taR method for capital budgeting decisions. The CFO says that the 1 the is a better methed because returns in percectage foem aru easier to understand and compare to nequired retums. Blue Lama Mining Company's Whce as 74 , and project sigma has the same risk as the firmit average preject. The Arajed is expected to generate the following net cosh fows! The project is expected to generate the following net cash flows: Which of the following is the correct calculation of project Sigma's 12R? 37.31%35.75%31.09%32.64% If this is an independent project, the ina method states that the firm shoold If the projectis cost of capital were to increase, how would that affect the iRs. The tre would decresse. If the project's cost of capital were to increase, how would that affect the IRR? The IRR would decrease. The IRR would not change. The 1RR would increase. 2. Internal rate of return (IRR) The internal rate of nhurn (IkR) refers to the compound annual rate of return that a project generates based on its up-front cost and subsequent cash Alws. Consiter the case of Blve Uama Mining Company: Bhe Lama Mining Company is rvaluatiog a proposed capital budgeting project (project Sigma) that wal require an initial investrnent of sin0,000 Bive Lams Mining Compacy has been basing capital budgeting decisions on a project's Npry; however, Itt new CFO wants to start using the taR method for capital budgeting decisions. The CFO says that the 1 the is a better methed because returns in percectage foem aru easier to understand and compare to nequired retums. Blue Lama Mining Company's Whce as 74 , and project sigma has the same risk as the firmit average preject. The Arajed is expected to generate the following net cosh fows! The project is expected to generate the following net cash flows: Which of the following is the correct calculation of project Sigma's 12R? 37.31%35.75%31.09%32.64% If this is an independent project, the ina method states that the firm shoold If the projectis cost of capital were to increase, how would that affect the iRs. The tre would decresse. If the project's cost of capital were to increase, how would that affect the IRR? The IRR would decrease. The IRR would not change. The 1RR would increase
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