Answer:
c. 11.32; reject
Explanation:
The IRR is the rate at with net present value equals zero.
[tex]-152,000 + \frac{60,800}{1+IRR} +\frac{62,300}{(1+IRR)^{2} } +\frac{65,000}{(1+ IRR)^{3} } = 0[/tex]
[tex]\left[\begin{array}{cc}Period&Cash Flow\\0&-152,000\\1&+60,800\\2&+62,300\\3&+65,000\\4&0.113237029\\\end{array}\right][/tex]
To solve it you use excel or a financial calculator:
0.1132370
Because the IRR is lower than minimun aceptable rate of return, the project should be rejected.
