Suppose a particular investment project will require an initial cash outlay of $1,000,000 and will generate a cash inflow of $500,000 in each of the next three years.What is the project's IRR? Suppose a company's hurdle rate is 15%,should it accept the project?

Question

Quizplus · Accepted Answer

Let r represent the IRR of the investment. -1,000,000 + 500,000/(1+r)+ 500,000/(1+r)² + 500,000/(1+r)³= 0 r = 23% IRR is higher than the hurdle rate,should accept the project.

Suppose a Particular Investment Project Will Require an Initial Cash