Use the Following Table for Questions 109-111 $\text { Present Value of an Annuity of } 1$

question 9

Multiple Choice

Use the following table for questions 109-111. $\text { Present Value of an Annuity of } 1$
$\begin{array}{rrrr}\text { Periods } & 8 \% & 9 \% & 10\%\\1 & .926 & .917 & .909 \\2 & 1.783 & 1.759 & 1.736 \\3 & 2.577 & 2.531 & 2.487\end{array}$
-A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $91,116 and is expected to generate cash inflows of $36,000 each year for three years. The approximate internal rate of return on this project is

• A) 8%.
• B) 9%.
• C) 10%.
• D) less than the required 8%.

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Definitions:

Sample Variances

A measure of the dispersion or spread of sample data points around their mean, indicating how spread out the sample values are.

Chi-Squared Distribution

A probability distribution that arises in statistics when a normal distribution is squared, commonly used in significance testing.

Degrees of Freedom

The count of distinct values or measures that can be allocated to a statistical distribution while adhering to all restrictions.

Chi-Squared Distribution

A probability distribution that is commonly used in hypothesis testing and models the distribution of sum of squares of independent standard normal random variables.