Spence Company Is Considering a Project That Has the Following

question 86

Multiple Choice

Spence Company is considering a project that has the following cash flow data.What is the project's IRR? Note that a project's IRR can be less than the cost of capital or negative, in both cases it will be rejected. $$\begin{array} { l c c c c c } \text { Year } & 0 & 1 & 2 & 3 & 4 \\\hline \text { Cash flows } & - \$ 1,050 & \$ 400 & \$ 400 & \$ 400 & \$ 400\end{array}$$

• A) 14.05%
• B) 15.61%
• C) 17.34%
• D) 19.27%
• E) 21.20%

---

Definitions:

Organizational Citizenship

Voluntary behaviors exhibited by employees that contribute to organizational well-being beyond their required duties.

Perceptions

The process by which individuals organize and interpret their sensory impressions to give meaning to their environment.

Unconditional Positive Regard

The acceptance of individuals as worthy and valuable regardless of their behavior, usually applied to parental acceptance of children.

Internal Locus

The belief that one’s actions are primarily guided by personal decisions and efforts rather than by external forces.