You are considering an investment for which you require a 14 percent rate of return.The investment costs $61,900 and will produce cash inflows of $26,000 for three years.Should you accept this project based on its internal rate of return? Why or why not?
A)Yes, because the IRR is 12.51 percent
B)Yes, because the IRR is 13.65 percent
C)Yes, because the IRR is 13.67 percent
D)No, because the IRR is 12.51 percent
E)No, because the IRR is 13.65 percent

Question

Quizplus · Accepted Answer

The IRR is defined as the interest rate that makes the NPV equal zero.The project should be rejected because the IRR is less than the required rate.

You Are Considering an Investment for Which You Require a 14