Technology corp. is considering a $238,160 investment in a new marketing campaign that it anticipates will provide annual cash flows of $52,000 for the next five years. the firm has a 6% cost of capital. what should the analysis indicate to the firm's managers? (a) irr is 8%. accept the project.
(b) irr is 3%. reject the project.
(c) irr is 4%. reject the project.
(d) irr is 6%. accept the project.

B) IRR is 3%. Reject the project.

Explanation:

We can use an excel spreadsheet to calculate the internal rate of return (IRR) for this investment:

we can use the IRR function =IRR(values,[guess])

where:

=IRR(-238160,52000,52000,52000,52000,52000) = 3%

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