(Present Value Tables Are Required

question 28

Multiple Choice

(Present value tables are required. ) Currence Corporation is considering the purchase of a special blow-molding machine that would cost $59,752 and would have a useful life of 8 years.The machine would generate $11,200 of net annual cash inflows per year for each of the 8 years of its life.The internal rate of return on the machine would be closest to

• A)8%.
• B)10%.
• C)12%.
• D)14%.

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Definitions:

Obtained Value

The actual value measured or calculated from a statistical test, which is compared against the critical value to draw conclusions.

Test Computation

The process of calculating results from test data, often using statistical methods to analyze the data.

Test Statistic

A value calculated from sample data during a hypothesis test that is used to determine the probability of observing the given or more extreme data if the null hypothesis is true.

T Value

A statistic calculated in a T-Test that determines the size of the difference relative to the variation in the sample data.