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:

Unilateral Contract

A contract where only one party makes a promise or undertakes a performance without requiring a reciprocal agreement from the other party.

Consideration

In contract law, consideration refers to something of value exchanged between parties, forming the basis for a contract.

Promissory Estoppel

A rule in law that prohibits an individual from retracting a pledge given to another if the latter has justifiably depended on this assurance to their harm.

Quasi Estoppel

A legal doctrine preventing a party from asserting rights or facts that contradict their past actions or statements.