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An investment has the following cash flows. Should the project be accepted if it has been assigned a required
return of 15 percent? Why or why not?
Year 0
Cash Flow
1 2
-50,000
3
+34,500
+14,000
+12,500
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sh the exam.
A. No; The IRR exceeds the required return by about 1.77 percent.
B. No; The IRR is less than the required return by about 1.77 percent.
C. Yes; The IRR is less than the required return by about 0.97 percent.
D. No; The IRR is less than the required return by about 0.97 percent.
