If a Project's IRR Is 13 Percent and the Project

question 42

Multiple Choice

If a Project's IRR is 13 percent and the project provides annual cash flows of $15,000 for four years, how much did the project cost?

• A)$44,617
• B)$52,200
• C)$60,000
• D)$72,747

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Definitions:

Natural Monopoly

A market condition where due to high infrastructure or setup costs, a single supplier is more efficient than multiple competing ones, often seen in utilities.

International Nickel Company

A historically significant Canadian corporation involved in the mining and processing of nickel and other metals; known today as Vale Canada Limited after various mergers and acquisitions.

Southwestern Bell

A former American telecommunications company that was one of the seven original Regional Bell Operating Companies after the U.S. Department of Justice broke up the American Telephone & Telegraph Company in 1984.

Legal Barrier

Any law or regulation that limits or controls the entrance of a firm into an industry or the launch of a new product.