A firm is evaluating two independent projects utilizing the internal r

A firm is evaluating two independent projects utilizing the internal rate of return technique. Project X has an initial investment of $80,000 and cash inflows at the end of each of the next five years of $25,000.

Project Z has a initial investment of $120,000 and cash inflows at the end of each of the next four years of $40,000. The firm should:
A) accept both if their cost of capital is 15% at the maximum.
B) accept only Z if their cost of capital is 15% at the maximum.
C) accept only X if their cost of capital is 15% at the maximum.
D) reject both if their cost of capital is 12% at the maximum.

ANSWER

C