Inco Purchased a Computer for $200,000, and This Machine Is

question 88

Multiple Choice

Inco purchased a computer for $200,000, and this machine is expected to generate annual cash flows of $48,271 over the next 5 years. What is the expected rate of return on this investment?

• A) 8.84%
• B) 26.58%
• C) 6.61%
• D) None of these are correct

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Definitions:

Liquidated Damages

A contractual provision that determines in advance the amount of damages to be paid if a party breaches the contract.

Breaching Party

The party in a contract who fails to fulfill their contractual obligations, thereby violating the agreement.

Objective Impossibility

A situation where it is not possible to carry out a contract's obligations due to uncontrollable external circumstances.

Bankruptcy

A legal proceeding involving a business or individual that is unable to repay outstanding debts, leading to the disposition of assets to pay creditors.