Question: Suppose that a manager is given a new project with the following cash flows: Year Cash flow ($ million) 0 -100 1 30 2 40

Suppose that a manager is given a new project with the following cash flows:

Year Cash flow ($ million)
0 -100
1 30
2 40
3 50
4 50

What is the internal rate of return of this project? According to the IRR rule, should the manager undertake this project?

Group of answer choices

IRR is 15.3%. The manager needs to undertake this project because the IRR is higher than the discount rate.

IRR is 15.3%. The manager should not undertake this project because the IRR is higher than the discount rate.

IRR is 22.8%. The manager needs to undertake this project because the IRR is higher than the discount rate.

IRR is 22.8%. The manager should not undertake this project because the IRR is higher than the discount rate.

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