Lucie Is Reviewing a Project with an Initial Cost of $38,700

Multiple Choice

Lucie is reviewing a project with an initial cost of $38,700 and cash inflows of $9,800,$16,400,and $21,700 for Years 1 to 3,respectively.Should the project be accepted if it has been assigned a required return of 9.75 percent? Why or why not?

A) Yes; because the IRR exceeds the required return by .34 percent
B) Yes; because the IRR is less than the required return by .28 percent
C) Yes; because the IRR exceeds the required return by .28 percent
D) No; because the IRR exceeds the required return by .34 percent
E) No; because the IRR is only 9.69 percent