CIMA Risk Management P3 Question # 42 Topic 5 Discussion

CIMA Risk Management P3 Question # 42 Topic 5 Discussion

P3 Exam Topic 5 Question 42 Discussion:
Question #: 42
Topic #: 5

P has decided to invest in a new warehouse at a cost of $2,000,000. The discount rate of the project is 18% and the present value of the tax shield is £26,000.

What is the minimum acceptable Internal Rate of Return of the project?


A.

18%


B.

17.77%


C.

18.23%


D.

16.50%


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