In: Finance
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 2.0 and 3.0 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: –$8,900 $1,070 $2,270 $1,470 $1,470 $1,270 $1,070 Use the IRR decision rule to evaluate this project. (