You are considering a project X which has the following cash flows:

Year                  0                    1                2             

Project X    ($8,000)         $50,000    ($50,000)

Project X has two IRRs of 25% and 400%. Its cost of capital is 15%. Which of the following statements best describes Project X? (Hint: draw NPV profile).

If the cost of capital would be between the two IRRs, it could be accepted.

No matter what its cost of capital is, it should be accepted.

All of the statements are not consistent with Project X.

Since both IRRs are greater than its cost of capital, it should be accepted.

No matter what its cost of capital is, it should be rejected.