Question

Compute the IRR static for Project E. The appropriate cost of capital is 9 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Project E Time: 0 1 2 3 4 5 Cash flow –$1,800 $670 $720 $680 $460 $260 IRR % Should the project be accepted or rejected? Rejected Accepted

Answer 1

The IRR of the project is 19.38%

The project should be accepted.

As a general rule, if the IRR of a project is higher than MARR, then the project is accepted, otherwise it is rejected or the investor stays indifferent.