A Firm Is Considering a Project Requiring an Investment of £100,000

question 58

Multiple Choice

A firm is considering a project requiring an investment of £100,000. The project would generate annual cash inflows of £26,380 per year for the next five years. The approximate internal rate of return for the project is

• A)8%.
• B)10%.
• C)12%.
• D)16%.

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Definitions:

Effort

The amount of energy, time, or resources expended towards achieving a goal or completing a task.

External Justification

Refers to reasons or explanations provided for a person's behavior that lie outside the individual, often used to explain actions that contradict one's own beliefs or values.

Cognitive Dissonance

The psychological unease felt by someone who simultaneously maintains two or more conflicting beliefs, ideas, or values.

Theory of Reasoned Action

A psychological theory that predicts an individual's intention to engage in a behavior at a specific time and place, considering attitudes toward the behavior and subjective norms.