A company is considering a 5-year project. The company plans to invest $60,000 now and...
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Accounting
A company is considering a 5-year project. The company plans to invest $60,000 now and forecasts net cash flows for each year of $16,200. The company requires a hurdle rate of 12%. Calculate the internal rate of return (IRR) to determine whether the company should accept this project. Selected factors for the present value of an annuity of $1 for 5 years are shown below: Interest Rate
Select one or more:
a.
The project earns more than 10% but less than 12%. At a hurdle rate of 12%, the project should be rejected.
b.
The project should be accepted.
c.
The project should be rejected because it earns less than 10%.
d.
The project earns more than 14%, well over the hurdle rate of 12%. At a hurdle rate of 12%, the project should be accepted.
e.
Only 10% is acceptable.
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