An Asset Is Purchased for $100,000

question 41

Multiple Choice

An asset is purchased for $100,000. It is expected to provide an additional $15,600 of annual net cash inflows. The asset has a 10-year life and no expected salvage value. The hurdle rate is 10%. Assume the following present value factors: Given the data provided, the internal rate of return would be approximately:

• A) 12%
• B) 10%
• C) 9%
• D) 8%

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Definitions:

Governmental Influence

The extent to which government actions or policies affect the decisions and actions of individuals or organizations.

Compete

To strive against others for the purpose of achieving something, such as a prize or a higher level of achievement, often under conditions of equal footing and rules.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Protect

To defend or safeguard from harm, danger, or loss, often pertaining to individuals, groups, or entities.