Landy Company Is Using the Internal Rate of Return Method

question 130

Multiple Choice

Landy Company is using the internal rate of return method to decide whether to make an investment that will cost $120,000 and which is expected to generate economic resources for 5 years. Landry determines the IRR is 3.12. What information does the IRR provide?

• A) Landy expects to earn 3.12% of its investment as cash flows each year the asset is used.
• B) Landy expects to earn a 3.12% return over the life of its investment.
• C) Landy expects the asset will produce profits equal to 3.12% of the asset's cost each year.
• D) Landy expects to recover its cash over 3.12 years.

---

Definitions:

Publication

The act of making content available to the public, typically through books, journals, or online platforms.

Traditional Print Media

Forms of communication that are printed and distributed, such as newspapers, magazines, and books.

Specific

Clearly defined or identified; precise and particular.

Scholarly Articles

Research papers that have been peer reviewed and published in academic journals.