A Firm Is Considering a Project Requiring an Investment of $30,000

question 95

Multiple Choice

A firm is considering a project requiring an investment of $30,000. The project would generate an annual cash flow of $7,251 for the next six years. The company uses the straight-line method of depreciation with no mid-year convention. Ignore income taxes. The approximate internal rate of return for the project is:

• A)11%.
• B)9%.
• C)10%.
• D)12%.

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Definitions:

Randomized Block Design

An experimental setup that arranges subjects into blocks based on certain attributes before randomly assigning treatments, to reduce variation.

Treatments

In the context of experimentation, treatments refer to the different conditions applied to groups in an experiment to study their effects on outcomes.

Spearman's Rank Correlation

A non-parametric measure of rank correlation that assesses the strength and direction of association between two ranked variables.

Productivity

The rate at which goods or services are produced, often considered in terms of output per unit of input.