Multiple Choice
Shanghai Shipping is considering investing in a project that requires an after-tax initial investment of 156 million and is expected to produce after-tax cash inflows of $40 million for each of the next five years.The firm's cost of capital is 10%.Based on this information, the IRR of the project is _________ percent and the firm should _________ the project.
A) 9.9; accept
B) -9.9, reject
C) 8.9, accept
D) -8.9, reject
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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