Problem

Consider a project with the following cash flows: C0C1C2-100+200-75a. How many internal r...

Consider a project with the following cash flows:

C0

C1

C2

-100

+200

-75

a. How many internal rates of return does this project have?


b. Which of the following numbers is the project IRR:

(i) -50%; (ii) -12%; (iii) +5%; (iv) +50%?


c. The opportunity cost of capital is 20%. Is this an attractive project? Briefly explain.

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Solutions For Problems in Chapter 5