A firm evaluates all of its projects by applying the IRR rule. A project under consideration...

Question

Question

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

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Let irr be x%
At irr,present value of inflows=present value of outflows.

28800=12800/1.0x+15800/1.0x^2+11800/1.0x^3

Hence x=irr=19.26%(Approx).

Hence since irr is greater than required return;project must be accepted.

Add a comment

Answer 2

Similar Homework Help Questions

A firm evaluates all of its projects by applying the IRR rule. A project under consideration...

A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year 0 1 Cash Flow -$34,000 15,000 17,000 13,000 WN- If the required return is 14 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR I % Should the firm accept the project? Accept Reject
A firm evaluates all of its projects by applying the IRR rule. A project under consideration...

A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year 0 Cash Flow -$ 28,200 12,200 15,200 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 No
A firm evaluates all of its projects by applying the IRR rule. A project under consideration...

A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: 0 Year Cash Flow $27,000 11,000 14,000 10,000 6.66 points eBook If the required return is 16 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Print References IRR Should the firm accept the project? Yes No

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

A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: points Year Cash Flow 0 29.000 13,000 16.000 12.000 eBook References If the required return is 15 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?
A firm evaluates all of its projects by applying the NPV decision rule. A project under...

A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year O Cash Flow -$27,800 11,800 14,800 10,800 What is the NPV for the project if the required return is 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV At a required return of 11 percent, should the firm accept this project? No Yes What is the NPV for...
A firm evaluates all of its projects by applying the IRR rule. A project under consideration...

A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year Cash Flows 0 -$34,000 1 $15,000 2 $17,000 3 $13,000 1) If the required return is 14 percent, what is the IRR for this project? 2) Should the firm accept the project? A) Reject B) Accept

A firm evaluates all of its projects by applying the IRR rule. A firm evaluates all...

A firm evaluates all of its projects by applying the IRR rule. A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 0 $ 154,000 62,000 1 - NM 77,000 61,000 What is the project's IRR? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return If the required return is 13 percent, should the firm accept the project?
A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following...

A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year Cash Flow -$34,000 15,000 17,000 13,000 What is the NPV of the project if the required return is 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV At a required return of 11 percent, should the firm accept this project? Yes O No What is the NPV of...
I need help with this question A firm evaluates all of its projects by applying the...

I need help with this question A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year Cash Flow 0 728,900 12,900 15,900 3 11,900 If the required return is 14 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR Should the firm accept the project? NO Yes

A firm evaluates all of its projects by applying the NPV decision rule. A project under...

A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year Cash Flow 0 -$28,300 12,300 15,300 11,300 What is the NPV for the project if the required return is 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e... 32.16.) NPV At a required return of 11 percent, should the firm accept this project? ONO Yes What is the NPV for...

A firm evaluates all of its projects by applying the IRR rule. A project under consideration...

Homework Answers