Matthew's Construction Is Considering a Project That Will Cost $1

question 280

Multiple Choice

Matthew's Construction is considering a project that will cost $1.2 million to start. The project is expected to produce cash flows starting in year 2 of $269,000 a year for the following six years.
What is the internal rate of return on this project?

• A) 4.09%
• B) 5.62%
• C) 6.97%
• D) 8.32%
• E) 9.19%

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Definitions:

Thinking

A cognitive process used to transform or manipulate information that may be either focused (i.e., solving problems with clear goals) or unfocused (i.e., invoking loosely related ideas without a clear purpose).

Information Given

The data or facts provided or available in a specific context or situation.

Generate-and-test

A problem-solving strategy that involves generating potential solutions and testing them to see if they solve the given problem.

Registrar's Office

A department within educational institutions that manages student records, class enrollment, room assignments, and graduation requirements.