Grace Corp

question 30

Multiple Choice

Grace Corp. ,whose required rate of return is 10%,is considering the purchase of a new piece of equipment.The internal rate of return of the project,which has a life of 8 years,is 12%.The project would have:

• A)an accounting rate of return greater than 10%.
• B)a payback period more than 8 years.
• C)a net present value of zero.
• D)a net present value greater than zero.

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Definitions:

Equation

A mathematical statement that asserts the equality of two expressions, often used to solve problems and express relationships in various fields.

Cross Price Elasticity

An indicator of the sensitivity of the demand for one product in relation to the price variations of a different product.

Mobile Service

Mobile service refers to the provision of telecommunication services such as voice and data communication over a network by a provider to a mobile device.

Landline Service

A form of telecommunication service that is delivered through a wired connection, typically using copper wires or fiber-optic cables.