b. Should the investment be accepted? Solution Hi, Please find the detailed answer as follows: Part A: Initial Investment = -425200 Annual Cash Inflows = 103420 To calculate IRR, you need to put the value of NPV as 0 and solve for r as follows: NPV = 0 = - 425200 + 103420/(1+r)^1 + 103420/(1+r)^2 + 103420/(1+r)^3 + 103420/(1+r)^4 + 103420/(1+r)^5 + 103420/(1+r)^6 Solving for r, we get IRR as: 12% IRR = 12% Part B: Yes , the project should be accepted as its IRR of 12% is higher than the cost of capital of 10%. Thnaks. .