Compute the IRR for Project X and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 9 percent.
A) 9%, accept
B) 9%, reject
C) 16.61%, accept
D) 16.61%, reject

Question

Compute the IRR for Project X and note whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 9 percent. 
A) 9%, accept 
B) 9%, reject 
C) 16.61%, accept 
D) 16.61%, reject

Quizplus · Accepted Answer

Using a financial calculator or Excel, the IRR for Project X is calculated to be 16.61%. Since the IRR is greater than the appropriate cost of capital of 9%, the project should be accepted.

Compute the IRR for Project X and Note Whether the Firm