A Firm Evaluates All of Its Projects by Applying the IRR

Multiple Choice

A firm evaluates all of its projects by applying the IRR rule. The current proposed project has cash flows of -$37,048, $16,850, $15,700, and $19,300 for Years 0 to 3, respectively. The required return is 18 percent. What is the project IRR? Should the project be accepted or rejected?

A) 18.42 percent; accept
B) 16.05 percent; accept
C) 16.05 percent; reject
D) 18.42 percent; reject
E) 21.08 percent; reject