A Certain Machine Will Last One Year, Will Produce $120

question 103

Multiple Choice

A certain machine will last one year, will produce $120 in income (received one year later) , and will cost $100.The lowest interest rate at which this investment will be unprofitable is

• A)10 percent.
• B)11 percent.
• C)19 percent.
• D)22 percent.

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Definitions:

Competitiveness

The ability of a company, country, or product to compete effectively and successfully in the marketplace.

Residual Income

The income that remains after all required costs of capital and operating expenses have been paid.

Return on Investment

A financial ratio that calculates the profitability of an investment by dividing the profit from the investment by the cost of the investment.

Goal Congruence

The alignment of individual, team, or department goals with the overall objectives of the organization to ensure everyone is working towards the same outcomes.