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How many irrs are there

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Reference no: EM13341014

Problems with IRR. Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows:

Year

Cash Flow

0

-$39,000,000

1

63,000,000

2

-$12,000,000

a. If the company requires a 12 percent return on its investments, should it accept this project? Why?

b. Compute the IRR for this project. How many IRRs are there? Using the IRR decision rule, should the company accept the project? What's going on here?

 

Reference no: EM13341014

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