A Project Requires an Initial Investment of $389,600

question 79

Multiple Choice

A project requires an initial investment of $389,600.The project generates free cash flow of $540,000 at the end of year 4.What is the internal rate of return for the project?

• A) 138.6%
• B) 38.6%
• C) 8.5%
• D) 6.9%

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Definitions:

Parol Evidence Rule

A common law rule which states that oral evidence of an agreement made prior to or contemporaneously with a written agreement is inadmissible when the parties intend to have the written agreement be the complete and final version of their agreement.

Express Warranty

An explicit promise made by a seller about the quality or functionality of a product or service, forming part of the contract.

Warranty Of Trade Usage

An implicit guarantee that a product or service conforms to the customary standards and practices in a particular industry or trade.

Fitness For A Particular Purpose

A warranty in sales law that goods will meet the specific request of the buyer.