A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year 0 1 2 3 Cash Flow -$28,700 12,700 15,700 11,700 If the required return is 15 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 13P
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A firm evaluates all of its projects by applying the IRR rule. A project under consideration
has the following cash flows:
с
raw
ill
Year
0
1
2
3
Cash Flow
IRR
-$28,700
12,700
15,700
11,700
If the required return is 15 percent, what is the IRR for this project? (Do not round
intermediate calculations and enter your answer as a percent rounded to 2 decimal
places, e.g., 32.16.)
Should the firm accept the project?
2
Yes
O No
I^/
#3
80
%
C
S4
R
67 5
%
5
< Prev
T
6
3 of 7
&
7
Next >
-
(
9
Transcribed Image Text:A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: с raw ill Year 0 1 2 3 Cash Flow IRR -$28,700 12,700 15,700 11,700 If the required return is 15 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Should the firm accept the project? 2 Yes O No I^/ #3 80 % C S4 R 67 5 % 5 < Prev T 6 3 of 7 & 7 Next > - ( 9
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