A Project Has Annual Income Exclusive of Depreciation of $80,000

question 84

Multiple Choice

A project has annual income exclusive of depreciation of $80,000. The annual rate of return is 15% and annual depreciation is $20,000. There is no salvage value. The internal rate of return is 12%. The initial cost of the project was

• A) $400,000.
• B) $500,000.
• C) $1,000,000.
• D) $800,000.

---

Definitions:

Central Bank

A bank whose chief function is the control of the nation’s money supply.

Marc Levinson

An economist, historian, and author known for his work on globalization, economics, and the history of business and technology.

Laffer Curve

An economic theory proposing that there is an optimal tax rate that maximizes government revenue without discouraging productivity and investment.

Marginal Tax Rates

The rate of tax applied to the last dollar of income, which varies depending on income level and tax bracket.