Use the Following Information for Questions 112-115 $\text { The company requires a } 10 \% \text { rate of return on all new investments. }$

question 107

Multiple Choice

Use the following information for questions 112-115.
Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below: $\begin{array}{lrr}&\text { Project Soup }&\text { Project Nuts }\\ \text { Initial investment } & \$ 400,000 & \$ 600,000 \\\text { Annual net income } & 30,000 & 46,000 \\\text { Net annual cash inflow } & 110,000 & 146,000 \\\text { Estimated useful life } & 5 \text { years } & 6 \text { years } \\\text { Salvage value } & -0- & -0-\end{array}$

$\text { The company requires a } 10 \% \text { rate of return on all new investments. }$

$\text { Present Value of an Annuity of } 1$
$\begin{array}{lllll}\text { Periods } & 9 \% & 10 \% & 11 \%& 12 \%\\5 & 3.890 & 3.791 & 3.696 & 3.605 \\6 & 4.486 & 4.355 & 4.231 & 4.111\end{array}$
-The cash payback period for Project Nuts is

• A) 13.3 years.
• B) 6.7 years.
• C) 5.0 years.
• D) 4.1 years.

Recognize the importance of experience, flexibility, and practice in the development of practical intelligence and expertise.

Analyze the impact of aging on different types of intelligence and strategies for compensation.

Describe how multiple-choice exams test analytic intelligence according to Sternberg's theory.

Explain the concept of tacit intelligence and its significance.

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Definitions:

Computerized Order System

A digital platform used to manage and process orders for goods or services efficiently.

Discount Rate

The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.

Opportunity Cost of Capital

Opportunity Cost of Capital is the return that is forgone by investing in a project instead of in comparable financial securities or projects with a similar risk profile.

Net Present Value

A calculation used to assess the profitability of an investment, measuring the difference between the present value of cash inflows and the present value of cash outflows over time.