Below Is a Table for the Present Value of $1

question 135

Multiple Choice

Below is a table for the present value of $1 at compound interest.
Below is a table for the present value of an annuity of $1 at compound interest.
Using the tables above, what would be the internal rate of return of an investment of $210,600 that would generate an annual cash inflow of $50,000 for the next 5 years?

• A) 6%
• B) 10%
• C) 12%
• D) 14%

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Definitions:

Credit Sales

Sales made on credit, where payment is received after the goods or services are delivered.

Cash Sales

Transactions where the purchase of goods or services is paid for with cash at the time of sale.

Sales Forecast

The process of estimating future sales, helping businesses make informed procurement, production, and marketing decisions.

Budgeted Cash

An estimation of cash inflows and outflows for a business over a specific period, used for financial planning purposes.