How many irrs does this project have

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Your firm is considering a project that will cost $4.55 million upfront, generate cash flows of $3.5 million per year for three years, and then have a clean up and shutdown cost of $6 million in the fourth year.

a. How many IRRs does this project have? (Construct an NPV profile.)

b. Based on the IRR rule, should you accept this project? What does the NPV rule say? Explain in detail.

Timeline

0 1 2 3 4

| | | | |

-4.55 3.5 3.5 3.5 -6

Reference no: EM132535344

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