Use the Following Table $\text { Present Value of an Annuity of } 1$

question 95

Multiple Choice

Use the following table $\text { Present Value of an Annuity of } 1$$\begin{array}{rrrr}\text { Period } & 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% and is considering investing in a project that costs $68337 and is expected to generate cash inflows of $27000 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:

Cultural Context

The environment or situation that surrounds the occurrence of a particular event, behavior, or understanding, significantly influenced by cultural practices and beliefs.

Four Humors

An ancient and medieval belief that health was maintained by a balance of four bodily fluids.

Hippocrates

An ancient Greek physician often referred to as the "Father of Medicine," known for his lasting contributions to the field such as the Hippocratic Oath.

Phlegm

A thick, sticky mucus secreted by the mucous membranes of the respiratory tract, particularly during a cold or other respiratory infection.