Author Question: According to the internal rate of return method, a firm should accept a project if the (Read 28 times)

bucstennis@aim.com · **on:** Apr 25, 2021

Question 1

A project requires an investment outlay of $100 immediately. The project will generate after-tax cash flows of $50 one year from now and $60 two years from now. What is the IRR of the project?
◦ 5.39%
◦ 6.39%
◦ 10.39%
◦ 12.39%
◦ 14.39%

Question 2

According to the internal rate of return method, a firm should accept a project if the
◦ internal rate of return is less than the cost of capital.
◦ internal rate of return exceeds the cost of capital.
◦ cost of capital exceeds the internal rate of return.
◦ internal rate of return exceeds the firm's cost of debt.
◦ internal rate of return exceeds the firm's cost of equity.

ricroger · **Reply #1 on:** Apr 25, 2021

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