Romer plc used the IRR and discounted payback methods of investment appraisal to evaluate an investment proposal that has an initial cash outlay followed by annual net cash inflows over its life. Following this evaluation, it was found that the cost of capital figure used was incorrect and that the correct figure was lower.

What will be the effect on the IRR and discounted payback period of correcting for this error?

Answer rating: 100% (QA)

When the cost of capital used in project evaluation is corrected to a lower value it will impact bot... View the full answer