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:

Drawing Account

An account that tracks the amount withdrawn by the owners from the business for personal use.

Credit Balance

The amount appearing on the credit side of a ledger, indicating the total credits exceed the total debits in an account.

Debit Balance

It is the remaining amount owing in an account after all debits and credits have been accounted for, typically found in asset and expense accounts.

Recorded By Credits

Recorded by Credits refers to accounting entries made on the credit side of an account, indicating an increase in liabilities, revenue, or equity, or a decrease in assets.