The Balistan Rug Company Is Considering Investing in a New

question 30

Multiple Choice

The Balistan Rug Company is considering investing in a new loom that will cost $12,000. The new loom will create positive end of year cash flow of $5,000 for the next 3 years. The internal rate of return for this project is:

• A) between 10% and 15%.
• B) between 15% and 20%.
• C) between 20% and 25%.
• D) between 25% and 30%.
• E) less than 10%.

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Definitions:

Normal Random Variable

A variable whose occurrences are distributed according to the normal distribution.

Percentile

A value on a scale of 100 that indicates the percentage of a distribution that is equal to or below it.

Standard Deviation

A quantification of how spread out or dispersed the values in a collection are, measuring the deviation of data points from their average.

Aptitude Test

An assessment designed to measure a candidate's ability to perform or learn a particular skill or set of skills.