A Proposed Project Will Require an Initial Investment of $1,000,000

question 46

Multiple Choice

A proposed project will require an initial investment of $1,000,000 and will generate net operating cash inflows of $250,000 per year for five years. What is the internal rate of return?

• A) Less than 9%
• B) 11%
• C) 13%
• D) Over 15%

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Definitions:

Ultra Vires

Acts or transactions conducted by a corporation that fall outside the scope of powers and purposes defined by its charter or laws; such acts may be invalid or unauthorized.

Clayton Act

The Clayton Act is a U.S. antitrust law, enacted in 1914, aimed at promoting competition and preventing monopolies by addressing specific practices not covered by the Sherman Act.

Interlocking Directorates

In antitrust law, a situation that occurs when individuals serve as directors for two corporations that are competitors.

Golden Parachute

A substantial financial package granted to a corporate executive upon termination, often after a takeover or merger.