Problem:
If project B has the cash flow timeline as: Year 0 $-100, Year 1 $75, Year 2 $100, Year 3 $300, Year 4 $75, Year 5 $200.
Required:
Question: Compute the IRR. If the cost of capital is 11%, should the firm accept or reject this project?
- 10.956%, reject
- 10.956%, accept
- 22%, accept
- 109.56%, accept
Note: Please provide equation and explain comprehensively and give step by step solution.