A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows:     Year Cash Flow 0 –$ 28,600   1   12,600   2   15,600   3   11,600        If the required return is 14 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:

   

Year Cash Flow
0 –$ 28,600  
1   12,600  
2   15,600  
3   11,600  
 

  

If the required return is 14 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?

 
  • Yes
  • No
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