Assume the following for a project under evaluation:
** The project's life is 4 years.
** The total time zero, initial cost of $55,000.
** The total net operating cash flow each year is $15,000.
** In addition to the terminal year operating cash flow, there is a non-operating, terminal year cash flow of $8,000.
What is the project's IRR? Accept or reject the project? Again, assume the cost of capital for a project of this risk is 7%.
7%; indifferent to accept or reject
8.4%; reject
8.4%; accept
15.75%, reject
15.75%: accept