A Company Is Considering an Iron Ore Extraction Project That

question 77

Multiple Choice

A company is considering an iron ore extraction project that requires an initial investment of $1,400,000 and will yield annual cash inflows of $613,228 for three years.The company's discount rate is 9%.Calculate IRR. Present value of ordinary annuity of $1:
$$\begin{array} { | r | r | r | r | r | r | r | r | } \hline & 10 \% & 12 \% & 14 \% & 15 \% & 16 \% & 18 \% & 20 \% \\\hline 1 & 0.909 & 0.893 & 0.877 & 0.870 & 0.862 & 0.847 & 0.833 \\\hline 2 & 1.736 & 1.690 & 1.647 & 1.626 & 1.605 & 1.566 & 1.528 \\\hline 3 & 2.487 & 2.402 & 2.322 & 2.283 & 2.246 & 2.174 & 2.106 \\\hline 4 & 3.170 & 3.037 & 2.914 & 2.855 & 2.798 & 2.690 & 2.589 \\\hline\end{array}$$

• A) 15%
• B) 17%
• C) 14%
• D) 13%

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Definitions:

Observational Learning

The process of learning behaviors by watching the behaviors of others and the consequences they face.

First Impression

The initial perception one forms about another person or thing, which can be influenced by various factors and may not be accurate.

Dream Job

An ideal or highly desired job or career position for an individual, often seen as fulfilling both personal passions and professional aspirations.

Partial Reinforcement

A conditioning strategy in which a reward is not administered every time the desired response is performed, leading to more resilient behavior.