Simms Corp. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected. $\begin{array}{c}
\begin{array}{lll}
\text {Year}\
\text {Cash flows}
\end{array}
\begin{array}{lll}
0 \
\hline -\$1,000
\end{array}
\begin{array}{lll}
1 \
\hline \$425
\end{array}
\begin{array}{lll}
2 \
\hline \$425
\end{array}
\begin{array}{lll}
3 \
\hline \$425
\end{array}
\end{array}$

a. $12.55 \%$
b. $13.21 \%$
c. $13.87 \%$
d. $14.56 \%$
e. $15.29 \%$

Question

Simms Corp. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected. $\begin{array}{c}
\begin{array}{lll}
 \text {Year}\
\text {Cash flows}
\end{array}
\begin{array}{lll}
 0 \
\hline -\$1,000 
\end{array}
\begin{array}{lll}
1 \
\hline \$425
\end{array}
\begin{array}{lll}
2 \
\hline \$425
\end{array}
\begin{array}{lll}
3 \
\hline \$425
\end{array}
\end{array}$

a. $12.55 \%$
b. $13.21 \%$
c. $13.87 \%$
d. $14.56 \%$
e. $15.29 \%$

Quizplus · Accepted Answer

The Answer of Simms Corp. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected. $\begin{array}{c}
\begin{array}{lll}
 \text {Year}\
\text {Cash flows}
\end{array}
\begin{array}{lll}
 0 \
\hline -\$1,000 
\end{array}
\begin{array}{lll}
1 \
\hline \$425
\end{array}
\begin{array}{lll}
2 \
\hline \$425
\end{array}
\begin{array}{lll}
3 \
\hline \$425
\end{array}
\end{array}$

a. $12.55 \%$
b. $13.21 \%$
c. $13.87 \%$
d. $14.56 \%$
e. $15.29 \%$

Simms Corp A 12.55%12.55 \%12.55% B 13.21%13.21 \%13.21% C 13.87%13.87 \%13.87% D 14.56%14.56 \%14.56%

Simms Corp A $12.55 \%$ B $13.21 \%$ C $13.87 \%$ D $14.56 \%$