Question

Suppose a particular investment project will require an initial cash outlay of $1,500,000 and will generate a cash

inflow of $350,000 in each of the next seven years. If the cost of capital is 12%, which of the following statements is true.

Reject the project because the project’s IRR is less than the cost of capital.

Accept the project because the project’s cost of capital is greater than the its IRR.

none of the answers are correct

Reject the project because the project’s NPV is negative.

Finance