The 3Z Company has estimated that a major project has an expected internal rate of return (IRR) of 18 percent. The most optimistic estimate of the project's IRR is 24 percent, and the most pessimistic estimate is 12 percent. The company expects that its most optimistic estimate of the project's achieved IRR will not be exceeded more than 10 percent of the time.
Similarly, 3Z managers do not expect an achieved IRR that is below 12 percent more than 10 percent of the time. The weighted cost of capital is 14 percent. What is the probability that this project will generate returns less than 3Z's weighted cost of capital?