Hart Corp. 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 cost of capital or negative, in both cases it will be rejected.
A) 12.55%
B) 13.21%
C) 13.87%
D) 14.56%
E) 15.29%

Question

Hart Corp. 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 cost of capital or negative, in both cases it will be rejected. 
A) 12.55% 
B) 13.21% 
C) 13.87% 
D) 14.56% 
E) 15.29%

Quizplus · Accepted Answer

To find the IRR, we need to calculate the NPV of the cash flows at different discount rates until we get a value close to zero. Using Excel, we find that the IRR is 13.21%. Since the IRR is higher than the cost of capital, the project should be accepted.

Hart Corp Is Considering a Project That Has the Following Cash