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Use the Following Information to Answer the Question(s)below

question 52

Multiple Choice

Use the following information to answer the question(s) below.
Two years ago,Krusty Krab Restaurant purchased a grill for $50,000.The owner,Eugene Krabs,has learned that a new grill is available that will cook Krabby Patties twice as fast as the existing grill.This new grill can be purchased for $80,000 and would be depreciated straight line over 8 years,after which it would have no salvage value.Eugene Krab expects that the new grill will produce EBITDA of $50,000 per year for the next eight years while the existing grill produces EBITDA of only $35,000 per year.The current grill is being depreciated straight line over its useful life of 10 years after which it will have no salvage value.All other operating expenses are identical for both grills.The existing grill can be sold to another restaurant now for $30,000.Krusty Krab's tax rate is 21%.
-If Krusty Krab's opportunity cost of capital is 12%,then the IRR for upgrading to the new grill is closest to:

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Mnemonic Devices

Techniques a person can use to help them improve their ability to remember something, often by enhancing the memory through vivid associations.

Concrete Words

Words that refer to objects, actions, or events that can be directly perceived by the senses, making them easier to visualize or understand.

Everyday Memory

Relates to a person's ability to remember and utilize information required for daily activities.

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A type of long-term memory that involves the recall of specific facts and events, which can be consciously retrieved and articulated.