Diamond Enterprises Is Considering a Project That Will Produce Cash

question 62

Multiple Choice

Diamond Enterprises is considering a project that will produce cash inflows of $41,650 a year for three years followed by $49,000 in Year 4.What is the internal rate of return if the initial cost of the project is $219,000?

• A)9.43 percent
• B)8.29 percent
• C)7.81 percent
• D)8.42 percent
• E)7.55 percent

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Definitions:

Detailed Plan

A comprehensive blueprint outlining specific actions, timelines, and resources required to achieve an objective.

Automatically Have Authority

An assumption that authority or power can be gained instantaneously or by default, without a formal process.

Will

The mental faculty by which an individual decides or chooses based on desires or motives; also refers to determination or resolve.

Skill

An ability or expertise developed through practice and training, aimed at performing specific tasks effectively.