Grace Corp. ,whose required rate of return is 10%,is considering the purchase of a new piece of equipment.The internal rate of return of the project,which has a life of 8 years,is 12%.The project would have:

Question

Quizplus · Accepted Answer

Since the internal rate of return (IRR) of the project is higher than the required rate of return (10%), the net present value (NPV) of the project is positive. Therefore, the project is expected to generate a return higher than the required rate of return, making it a profitable investment for Grace Corp.