Pandora,Inc.is considering a five-year project that has an initial outlay or cost of $70,000.The cash inflows from its project for years 1,2,3,4 and 5 are all the same at $14,000.The borrowing costs are 10%.What is the IRR? Should Pandora use the IRR method to evaluate this project? Explain.

Question

Quizplus · Accepted Answer

The Answer of Pandora,Inc.is considering a five-year project that has an initial outlay or cost of $70,000.The cash inflows from its project for years 1,2,3,4 and 5 are all the same at $14,000.The borrowing costs are 10%.What is the IRR? Should Pandora use the IRR method to evaluate this project? Explain.