A firm evaluates all its projects by applying the IRR rule. If the required return is 14 percent, should the firm accept the following project.?
Year Cash Inflows
0 -$28,000
1 $12,000
2 $15,000
3 $11,000
For 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 the project? What if the required return is 25 percent?