A Project Costs $1,000 Today and Is Expected to Produce

question 34

Multiple Choice

A project costs $1,000 today and is expected to produce cash inflows of $800 at the end of each of the next two years.If the firm's cost of capital is 10%,what is the modified internal rate of return? Round answer to the nearest whole percent.

• A) 30%
• B) 23%
• C) 13%
• D) 21%
• E) 33%

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Definitions:

Advertising

The practice of promoting products, services, or brands through various forms of media to attract potential customers and increase sales.

Rebate

A partial refund to someone who has paid for a product or service as a promotion or incentive, often used to encourage purchases or repeat business.

Cash Back

A perk or benefit offered by some credit cards or retailers, where a percentage of the amount spent is returned to the cardholder or customer.

Computer Manufacturer

A company or enterprise engaged in the design, assembly, and distribution of computer hardware and related products.