7. Spence Company is considering a project that has the following cash flow. What is the project's IRR? Note that a project's IRR can be less than the cost of capital or negative, in both cases it will be rejected. Year Cash Flows 1050 400 400 400 400 A.14.05% В. 15.61% C. 17.34% D. 19.27% 01234

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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7. Spence Company is considering a project that has the following cash flow.
What is the project's IRR? Note that a project's IRR can be less than the cost of
capital or negative, in both cases it will be rejected.
Year
Cash Flows
1050
1
400
400
3
400
400
4
A.14.05%
B. 15.61%
C. 17.34%
D. 19.27%
Transcribed Image Text:7. Spence Company is considering a project that has the following cash flow. What is the project's IRR? Note that a project's IRR can be less than the cost of capital or negative, in both cases it will be rejected. Year Cash Flows 1050 1 400 400 3 400 400 4 A.14.05% B. 15.61% C. 17.34% D. 19.27%
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