TB MC Qu$.11-114($Static$)$ Tressor Company is considering...

Tressor Company is considering a $5-$year project. The company plans to invest $$90,000$ now, and it forecasts cash flows for each year of $$27,000.$ The company requires that investments yield a discount rate of at least $14\%.$ Selected factors for a present value of an annuity of $$1$ for five years are shown below:

$$

Interest ratePresent value of an annuity of $$1$ factor for year $510\%3\mathrm{.}790812\%3\mathrm{.}604814\%3\mathrm{.}4331$

Calculate the internal rate of return to determine whether it should accept this project.

Multiple Choice

The project should be accepted because it will earn more than $14\%.$

The project should be accepted because it will earn more than $10\%.$

The project will earn more than $12\%$ but less than $14\%.$ At a hurdle rate of $14\%,$ the project should be rejected.

The project should be rejected because it will earn less than $14\%.$

The project should be rejected because it will not earn exactly $14\%.$