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Problems with IRR. Howell Petroleum , Inc., is trying to evaluate a generation project with the following cash flows:

Year 0 = -$39,000,000

Year 1 = $57,000,000

Year 2 = -9,000,000

A. If the company requires a return of 10 percent on its investments, should it accept this project? Why?

B. Compute the IRR for this project. How many IRRs are there? If you apply the IRR decision rule, should you accept the project or not? What' going on here?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92751701

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