The NPV is positive at a required return of
15%, so you should Accept
If you use the financial calculator, you
would get an IRR of 10.11% which would
tell you to Reject
Suppose an investment will cost $90,000
initially and will generate the following cash
flows:
• Year 1: 132,000
• Year 2: 100,000
• Year 3: -150,000
• The required return is 15%.
• Should we accept or reject the project?
1 answer
2 answers