EV Hyper Chargers is considering a project with the following cash flows: Year 0 Year 1 Year 2 Year 3 Year 4 -$133 million $30 million $40 million $55 million $75 million Use the IRR rule to decide which of the following statements is correct: The project should be accepted if the WACC is 17%, as the IRR of 15.76% is lower than the WACC The project should be accepted because the IRR of 15.76% is positive The project should be rejected if the WACC is 13%, as the IRR of 14.76% is higher than the WACC The project should be rejected if the WACC is 17%, as the IRR of 15.76% is lower than the WACC The project should be accepted if the WACC is 13%, as the IRR of 14.76% is higher than the WACC
EV Hyper Chargers is considering a project with the following cash flows: Year 0 Year 1 Year 2 Year 3 Year 4 -$133 million $30 million $40 million $55 million $75 million Use the IRR rule to decide which of the following statements is correct: The project should be accepted if the WACC is 17%, as the IRR of 15.76% is lower than the WACC The project should be accepted because the IRR of 15.76% is positive The project should be rejected if the WACC is 13%, as the IRR of 14.76% is higher than the WACC The project should be rejected if the WACC is 17%, as the IRR of 15.76% is lower than the WACC The project should be accepted if the WACC is 13%, as the IRR of 14.76% is higher than the WACC
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows
Section: Chapter Questions
Problem 19P
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Transcribed Image Text:EV Hyper Chargers is considering a project with the following cash flows:
Year 0
Year 1
Year 2
Year 3
Year 4
-$133 million $30 million
$40 million
$55 million
$75 million
Use the IRR rule to decide which of the following statements is correct:
The project should be accepted if the WACC is 17%, as the IRR of 15.76% is lower
than the WACC
The project should be accepted because the IRR of 15.76% is positive
The project should be rejected if the WACC is 13%, as the IRR of 14.76% is higher
than the WACC
The project should be rejected if the WACC is 17%, as the IRR of 15.76% is lower
than the WACC
The project should be accepted if the WACC is 13%, as the IRR of 14.76% is
higher than the WACC
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