Your firm is considering a project that will cost $4.441 million up front, generate cash flows of $3.47 million per year for 3 years, and then have a cleanup an shutdown cost of $6.05 million in the fourth year.
a. How many IRRs does this project have?
b. Calculate the IRR’s for this project assuming a discount and compounding rate of 10.3%.
c. Using the IRR’s and a cost of capital of 10.3%, would you take the project?
c. Using the IRR’s and a cost of capital of 10.3%, would you take the project?