Bumble Bee is thinking about purchasing a new clam digger for $14,000. The expected net cash flows resulting from the digger are $9,000 in year 1, $7,000 in the 2nd year, $5,000 in the 3rd year, and $3,000 in the 4th year. Should Bumble Bee purchase this digger if its cost of capital is 12 percent based on the IRR for the project? What is the IRR for the project?
Yes, 31.98%
No, 12.57%
Yes, 10.90%
No, 8.08%