Hart Corp. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the cost of capital or negative, in both cases it will be rejected. Year 0 1 2 3 Cash flows −$1,000 $425 $425 $425 a. 12.55% b. 14.56% c. 15.29% d. 13.21% e. 13.87%
Hart Corp. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the cost of capital or negative, in both cases it will be rejected. Year 0 1 2 3 Cash flows −$1,000 $425 $425 $425 a. 12.55% b. 14.56% c. 15.29% d. 13.21% e. 13.87%
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6EA: The management of Kawneer North America is considering investing in a new facility and the following...
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Hart Corp. is considering a project that has the following cash flow data. What is the project's IRR ? Note that a project's IRR can be less than the cost of capital or negative, in both cases it will be rejected.
Year | 0 | 1 | 2 | 3 |
Cash flows | −$1,000 | $425 | $425 | $425 |
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Expert Solution
Step 1
Given:
Year | Cashflows ($) |
0 | -1000 |
1 | 425 |
2 | 425 |
3 | 425 |
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