Spence Company is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the cost of capital or negative, in both cases it will be rejected.
Year0
1
2
3
4
Cash flows?$1,050
$400
$400
$400
$400
A. 14.05%
B. 15.61%
C. 17.34%
D. 19.27%
E. 21.20%
Answer: D
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