You are considering an investment for which you require a14 percent rate of retu

Question

You are considering an investment for which you require a14 percent rate of return. The investment will cost $85,000 andproduce cash inflows of $20,000 a year for 5 years. Should youaccept this project based on its internal rate of return? Why orwhy not?
a. no -- because the IRR is 14.12% b. yes -- because the IRR is equal to 14% c. yes -- because the IRR is 14.12% d. no -- because the IRR is 5.67% e. yes -- because the IRR is 14.67%
a. no -- because the IRR is 14.12% b. yes -- because the IRR is equal to 14% c. yes -- because the IRR is 14.12% d. no -- because the IRR is 5.67% e. yes -- because the IRR is 14.67%

Explanation / Answer

e. yes -- because the IRR is 14.67%

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