This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.Calculating NPV and IRR:
The internal rate of return is found by
0 = -34,000 + 16,000/(1+IRR) + 18,000/(1+IRR)2+15,000/(1+IRR)3
So IRR = 20.97%
If the required rate of return is 11%, the firm should accept the project because 20.97% > 11%.
If the required rate of return is 30%, the firm should reject the project because 20.97% < 30%....