Internal rate of return should this project be accepted

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Reference no: EM132021458

1. Last year Ark charged $2,948,933 Depreciation on the Income Statement of Andrews. If early this year Ark purchased a new depreciable asset, the effect on Andrews's financial statements would be (all other items remaining equal):

A) Decrease Net Cash from operations on the Cash Flow Statement

B) No impact on Net Cash from operations

C) Just impact the Balance Sheet

D) Increase Net Cash from operations

2. A proposed project has an initial cost of $38,000 and cash inflows of $12,300, $24,200, and $16,100 for years 1 through 3, respectively. The required rate of return is 16.8%. Based on Internal Rate of Return (IRR), should this project be accepted? Why or why not?

a. Yes; The IRR exceeds the required return by .58 percent.

b. No; The IRR is less than the required return by 1.03 percent.

c. Yes; The IRR exceeds the required return by about 1.03 percent.

d. No; The IRR exceeds the required return by .58 percent.

e. Yes; The IRR is less than the required return by .58 percent.

Reference no: EM132021458

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