A firm evaluates all of its projects by apply the IRR rule. If the required is 13 percent, should the firm accept the following project?
A project that provides annual cash flows of 2150 for nine year cost 8900 today. Is this a good project if the required return is 8 percent? What if it's 22 percent? At what discount rate would you be indifferent between accepting the project and rejecting it?
Aron shoeworks has the following mutually exclusive projects available. The company has historically used a four-year cutoff for project. The required return is 10 percent.