Wednesday, 28 October 2015

A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows:

A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows:
   
YearCash Flow
0–$28,200 
1 12,200 
2 15,200 
3 11,200 

  
If the required return is 13 percent, what is the IRR for this project? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

  IRR % 
  
Should the firm accept the project?
 
Yes

 
Explanation:

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