PART 1: A breakfast and lunch restaurant is considering an unusual project of se

Question

PART 1: A breakfast and lunch restaurant is considering an unusual project of selling a machine for an immediate inflow that will create the need to bear additional cost in the future. Specifically, the sale provides an immediate cash inflow (time zero) of $140 but also a one-time cash outflow of $385 that occurs at the end of year 4. The required rate of return is 15.35%. What is the project's internal rate of return (IRR)?

Place your answer as a percentage (not a decimal) with 2 decimal places of accuracy but without a percentage sign. For example, an answer of seven point four six percent would be placed as 7.46.

PART 2. Given your estimate of the IRR, should you accept or reject the project? Type the word "yes" if you believe you should go ahead with the project or the word "no" if you believe you should not go ahead with the project.

Explanation / Answer

IRR is the rate of return where NPV is zero.formula is CF0+CF1/(1+r)^1+CF2/(1+r)^2+CF3/(1+r)^...

IRR is -40

We should not go ahead with the project

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