Sunday, 3 August 2014

A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 0 –$ 158,000 1 58,000 2 81,000 3 65,000

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

Year Cash Flow
0 –$ 158,000       
1 58,000       
2 81,000       
3 65,000       


Requirement 1:
What is the project's IRR? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

  Internal rate of return    %  

Requirement 2:
If the required return is 15 percent, should the firm accept the project?
No


Explanation: