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 risk class is 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively. Time: 0 1 Cash flow: -$9,200 $1,060 2 $2,260 3 $1,460 4 $1,460 5 $1,260 6 $1,060 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.) IRR % Should it be accepted or rejected? accepted rejected

Answer 1

fx C =IRR(B3:39) D 3 4 B10 - А в 1 2 year Cash flows 0 $ (9,200.00) 1 $ 1,060.00 2 $ 2,260.00 3 $ 1,460.00 4 $ 1,460.00 5 $ 1,260.00 6 $ 1,060.00 IRR -2.13% Project should be rejected 12 13