Wilson Corp

question 5

Multiple Choice

Wilson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $50,000. The equipment will have an initial cost of $600,000 and have an 8-year life. The salvage value of the equipment is estimated to be $100,000. If the hurdle rate is 10%, what is the internal rate of return?

• A) Less than zero
• B) Between zero and 10%
• C) Between 10% and 15%
• D) More than 15%

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Definitions:

False Rumour

An untrue statement or tale spread among people, often causing misunderstanding or misinformation.

Insurance Policy

An insurance policy is a contract between an individual or entity and an insurance company, outlining coverage terms and conditions for specific risks.

Illegal Contract

An agreement that is void and unenforceable because it involves activities that are against the law.

Civil Litigation

The process of one party’s suing another in a private action, conducted in a trial court.