A Company Is Contemplating Investing in a New Piece of Manufacturing

question 141

Multiple Choice

A company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $100,000. The present value of the future cash flows at the company's desired rate of return is $105,000. The IRR on the project is 12%. Which of the following statements is true?

• A) The project should not be accepted because the net present value is negative.
• B) The desired rate of return used to calculate the present value of the future cash flows is less than 12%.
• C) The desired rate of return used to calculate the present value of the future cash flows is more than 12%.
• D) The desired rate of return used to calculate the present value of the future cash flows is equal to 12%.

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Definitions:

Hidden Curriculum

This refers to the unwritten, unofficial, and often unintended lessons, values, and perspectives that students learn in school, beyond the formal curriculum.

Resocialization

The process by which individuals undergo training or retraining to learn the norms, values, and behaviors appropriate for a new social role or environment.

Socializing Agents

Individuals, groups, or institutions that play significant roles in integrating individuals into the social world by teaching social norms, values, and roles.

Values, Roles

Fundamental beliefs or principles that guide behavior, and the functions or positions individuals occupy in a social system.