Driscoll Company Is Considering Investing in a New Project

question 40

Multiple Choice

Driscoll Company is considering investing in a new project. The project will need an initial investment of $2,400,000 and will generate $1,200,000 (after-tax) cash flows for three years. Calculate the IRR for the project.

• A)14.5 percent
• B)18.6 percent
• C)20.2 percent
• D)23.4 percent

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Definitions:

Hyperventilates

The condition of breathing at an abnormally rapid rate, leading to excessive loss of carbon dioxide.

Trachea

The windpipe; a tube that connects the pharynx and larynx to the lungs, allowing the passage of air.

Epiglottis

Structure that covers the glottis, the air-tract opening, during the process of swallowing.

Bronchioles

The small passages in the lungs that lead from the bronchi to the alveoli, involved in the process of breathing.