Hua Xing Runs a Lawn Care Service

question 187

Multiple Choice

Hua Xing runs a lawn care service. Buying an additional riding lawn mower will cost $3,000 but would allow her firm to earn $1,000 of additional revenue each year for the next four years. She expects marginal efficiency of capital to be at least 10%. Which statement is an accurate description of this investment opportunity?

• A) Hua Xing should make the investment because turning $3,000 into $4,000 provides a rate of return of 33%.
• B) Hua Xing should not make the investment because it provides only a 5.16% return on investment.
• C) Hua Xing should not make the investment because it has a negative net present value.
• D) Hua Xing should make the investment because the internal rate of return exceeds 10%.

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Definitions:

International Statistical Classification

A system used globally to categorize diseases, disorders, health conditions, and related health problems for statistical and epidemiological purposes.

American Medical Association

A professional association for physicians and medical students in the United States that aims to promote the art and science of medicine for the betterment of public health.

Abnormal Intellectual Functioning

Describes cognitive capabilities that significantly deviate from the average, often implying challenges in learning, reasoning, and daily problem-solving.

Emotional Control

Refers to the ability to manage and regulate one's emotions, especially in difficult or stressful situations, allowing for appropriate responses and behaviors.