Author Question: Project Delta has the following cash flows:CF 0 $11,000CF 1 $0CF 2 $700CF 3 $1,000CF 4 $4,000CF 5 ... (Read 53 times)

gjjjjjdkkkkk3k3k33k · **on:** Aug 7, 2023

Question 1

Project Delta has the following cash flows:

CF 0 –$1,200,000
CF 1 $400,000
CF 2 $600,000
CF 3 $300,000
CF 4 $70,000

Calculate the project’s IRR given a required rate of return of 23%.

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IRR = 6.83%

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IRR = 7.24%

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IRR = 8.56%

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IRR = 11.50%

Question 2

Project Delta has the following cash flows:

CF 0 –$11,000
CF 1 $0
CF 2 $700
CF 3 $1,000
CF 4 $4,000
CF 5 $7,000

If this project has a required rate of return of 16%, will management accept or reject the project?

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Management would reject the project since there are no positive cash flows in year 1.

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Management would reject the project because the project has an NPV of –$4,297.

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Management would reject the project because the project has an NPV of –$4,598.

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Management would accept the project because the project has an NPV of $4,297.

Rcfelber · **Reply #1 on:** Aug 7, 2023

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