Computation and capital budgeting decision based on irr

Reference no: EM1314205

Computation and capital budgeting decision based on IRR.

An investment has the following cash flows. Should the project be accepted if it has been assigned a required return of 9.5%? Why or why not?

Year	Cash flow
0	($24,000)
1	$8,000
2	$12,000
3	$9,000

A. yes; because the IRR exceeds the required return by about 0.39%

B. yes; because the IRR is less than the required return by about 3.9%

C. yes; because the IRR is positive

D. no; because the IRR exceeds the required return by about 3.9%

E. no; because the IRR is 9.89%

Reference no: EM1314205

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