Suppose a beverage company with a 13.4879% WACC is considering an investment in Stella’s Lemonade Stand. The project has the following cash flows:
She needs $165,000; at time zero but expect the following cash flows:
Year 1: $63,120;
Year 2: $70,800;
Year 3: $91,080;
Based on NPV analysis should the firm invest in this project?
Compute IRR
Based on IRR analysis should the firm invest in this project?