A firm evaluates all of its projects by applying the IRR rule. If the required return is 14 percent, should the firm acceot the following project?
| Year |
|
| 0 |
-$26,000 |
| 1 |
11,000 |
| 2 |
14,000 |
| 3 |
10,000 |
For the 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 this project? What if the required return is 24 percent?