An Investment Costs $152,000 and Has Projected Cash Inflows of $71,800

Multiple Choice

An investment costs $152,000 and has projected cash inflows of $71,800, $86,900, and -$11,200 for Years 1 to 3, respectively. If the required rate of return is 15.5 percent, should you accept the investment based solely on the internal rate of return rule? Why or why not?

A) Yes; The IRR exceeds the required return.
B) Yes; The IRR is less than the required return.
C) No; The IRR is less than the required return.
D) No; The IRR exceeds the required return.
E) You should not apply the IRR rule in this case.