A firm evaluates all of its projects by applying the IRR rule. If the required return is 14 percent, should the firm accept the following project?
0 = - $26,000 + $11,000/(1+IRR) + $14,000/(1+IRR)^2 + $10,000/(1+IRR)^3
IRR = 16.69%
The firm should accept the project because the IRR is higher than the return required.
The information needed is above and attached. I need the answer to the question below.
For the cash flows in the previous problem, suppose the firm uses the NPV decision rule. At a required return of 11 percent, should the firm accept this project? What if the required return is 24 percent?