Dons Corporation Is Planning a 15 Year Project with an Initial

question 36

Multiple Choice

Dons Corporation is planning a 15 year project with an initial investment of $2,500,000.The project will have $400,000 cash inflows per year in years 1-5; $200,000 cash inflows in years 6-10, and $40,000 cash inflows in years 11-15.Determine the projects rate of return.

• A)12.67%
• B)9.35%
• C)5.15%
• D)3.67%

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Definitions:

Value Engineering

A systematic process aimed at increasing the value of a product, project, or service by examining its functions, improving performance, and ensuring cost efficiency.

Value Analysis

A systematic approach to assess the functionality of goods and services with the goal of reducing cost without compromising on quality.

Reducing Costs

A process aimed at lowering the overall expenses involved in running a business or producing goods and services.

Supply Management

The practice of managing the supply chain activities and relationships to achieve competitive advantage and optimize cost.