Maxwell Feed & Seed 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 WACC (and even negative), in which case it will be rejected.
A)2.08%
B)2.31%
C)2.57%
D)2.82%
E)3.10%

Question

Quizplus · Accepted Answer

Using a financial calculator or Excel, we find that the IRR of the project is approximately 2.57%. Since the IRR is greater than the WACC (which we assume to be the required return on the project), the project is acceptable. Therefore, the best choice is C.

Maxwell Feed & Seed Is Considering a Project That Has