Considering an investment with the cash flows

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You are considering an investment with the following cash flows. If the required rate of return for this investment is 13.5%, should you accept it based solely on the internal rate of return rule? Why or why not?

Year Cash Flow

0 -$12,000

1 $5,500

2 $8,000

3 -$1,500

a. yes; because the IRR exceeds the required return

b. yes; because the IRR is a positive rate of return

c. no; because the IRR is less than the required return

d. no; because the IRR is a negative rate of return

e. You can not apply the IRR rule in this case because there are multiple IRRs

Reference no: EM13914404

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