= The "mirror image" of this project with cash flows +$20000, -$2000, -$8000, -S12000, -$8000, -$2000 (T-0 to T=5, respectively) also has an IRR of 17.5%. Should it be undertaken if the MARR is 12%? Justify your answer by providing an interpretation of IRR in this case? Without making the calculation, is NPV positive or negative, given what you know about the IRR decision rule for this type of cash flow pattern?
= The "mirror image" of this project with cash flows +$20000, -$2000, -$8000, -S12000, -$8000, -$2000 (T-0 to T=5, respectively) also has an IRR of 17.5%. Should it be undertaken if the MARR is 12%? Justify your answer by providing an interpretation of IRR in this case? Without making the calculation, is NPV positive or negative, given what you know about the IRR decision rule for this type of cash flow pattern?
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 2P
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