Use the Following Table $\text { Present Value of an Annuity of } 1$

question 55

Multiple Choice

Use the following table, $\text { Present Value of an Annuity of } 1$
$\begin{array}{lrrr}\text { Period }&8\%&9\%&10\%\\1 & .926 & .917 & .909 \\2 & 1.783 & 1.759 & 1.736 \\3 & 2.577 & 2.531 & 2.487\end{array}$ A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $379,650 and is expected to generate cash inflows of $150,000 each year for three years. The approximate internal rate of return on this project is

• A)8%.
• B)9%.
• C)10%.
• D)The IRR on this project cannot be approximated.

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Definitions:

Moving

The act of changing one’s residence or place of business; involves packing, transporting, and unpacking personal belongings or equipment.

Relativistic

Pertaining to the concept that points of view have no absolute truth or validity, being dependent instead on the perspectives and contexts from which they arise.

Reflective

Characterized by deep thought and careful consideration, often leading to insights about oneself or the world.

Pragmatic

Pertaining to a practical point of view or practical considerations, often favoring realistic and practical approaches to solving problems.