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Business, 24.01.2020 19:31 kaytonleeb

You have the chance to participate in a project that produces the following cash
flows: c0 =5; 000; c1 = 4; 000; c2 = -11; 000: the internal rate of return is 13%. if
the opportunity cost of capital is 10%, would you accept the offer?
no. you are effectively borrowing at a rate of interest higher than the opportunity cost of
capital. the irr rule works for a stand-alone project if all of the project’s negative
cash flows precede its positive cash flows. this is one of the counter-example, where the
negative cash flows arise during the last periods.

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You have the chance to participate in a project that produces the following cash
flows: c0 =5...

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