Midize Flower Company Provides Flowers and Other Nursery Products for Decorative

question 118

Multiple Choice

Midize Flower Company provides flowers and other nursery products for decorative purposes in medium to large sized restaurants and businesses. The company has been investigating the purchase of a new specially equipped van for deliveries. The van will cost $61,392 with a eight-year life. The expected additional cash inflows are $16,000 per year. What is the internal rate of return?

• A) 17%
• B) 20%
• C) 22%
• D) 27%

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Definitions:

Available Balance

The amount of money in an account that is accessible for use.

Float

The time difference between when a check is written and deposited and when it is cleared and funds are available, or, in finance, the amount of shares available for trading by the public in the stock market.

Collection Float

The time period between when a check is written and deposited and when the funds are actually available in the payee's account.