IRR can be less than WACC; which case is rejected

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10) Thompson stores is considering a project that has the following cash flow data. What is the projects IRR. Note that the projects projected IRR can be less than WACC (and even negative), in which case it will be rejected.

YEAR CASH FLOW

0 (1000)
1 300
2 295
3 290
4 285
5 270

CHOICES GIVEN:

11.16%

12.4%

13.78%

15.16%

16.68%

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Solution Summary

The solution calculates which case is rejected.

$2.49