A firm is considering a project with the following cash flows: Time 0 = -$20,000, Years 1-5 = $4,500. Should the project be accepted if the cost of capital is 5%? A. No; The IRR of the project is 12.5%. B. Yes; The IRR of the project is 12.5%. C. Yes; The IRR of the project is 4.06%. D. No; The IRR of the project is 4.06%.

A firm is considering a project with the following cash flows: Time 0 = -$20,000, Years 1-5 = $4,500. Should the project be accepted if the cost of capital is 5%? A. No; The IRR of the project is 12.5%. B. Yes; The IRR of the project is 12.5%. C. Yes; The IRR of the project is 4.06%. D. No; The IRR of the project is 4.06%.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 14P

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	A.	No; The IRR of the project is 12.5%.
	B.	Yes; The IRR of the project is 12.5%.
	C.	Yes; The IRR of the project is 4.06%.
	D.	No; The IRR of the project is 4.06%.