Question

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this is class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 30 years, respectively Tine Cashow $1,000 $2,240 $1,442 $1. a $1.242 51.842 Use the IRR decision rule to evaluate this project (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.) RRE Should it be accepted or rejected? accepted rejected

Answer 1

note: Its not very clear in the pic if year 0 cash flow is -9800 or -9000. I guess its -9800 and i am providing the answer -

A B C D E F G year Cash flow 0 -9800 1 1040 2240 1440 1440 1240 1040 Formula =IRR(D4:010) IRR = -4.33% Project should be REJECTED because IRR is negative