MENU
P has decided to invest in a new warehouse at a cost of $2,000,000. The discount rate of the project is18% and the present value of the tax shield is 26,000.
What is the minimum acceptableInternal Rate of Return of the project?
Suggested Answer: B
Get Premium CIMAPRA19-P03-1 Questions
as Interactive Web-Based Practice Test or PDF
Real Exam Format
Detailed Explanations
Instant Access
Get Your Practice Test
2 comments · newest first
JE
Jesse
3 hours ago
I’m not entirely sure, but I think we might need to consider the tax shield when calculating the IRR.
IL
Ilene
5 days ago
I remember that the minimum acceptable IRR should be at least equal to the discount rate, so I think it might be 18%.