After a Long Drought, the Manager of Long Branch Farm

question 37

Multiple Choice

After a long drought, the manager of Long Branch Farm is considering the installation of an irrigation system which will cost $100,000. It is estimated that the irrigation system will increase revenues by $20,500 annually, although operating expenses other than depreciation will also increase by $5,000. The system will be depreciated using MACRS over its depreciable life (5 years) to a zero salvage value. If the tax rate on ordinary income is 40 percent, what is the project's IRR?

• A) 12.6%
• B) -1.3%
• C) 13.0%
• D) 10.2%
• E) -4.8%

---

Definitions:

Biopsychosocial Approach

A holistic approach to understanding human health and illness that considers biological, psychological, and social factors.

Learning Perspective

An approach in psychology that emphasizes the importance of experience and learning in understanding behavior.

Biopsychosocial Approach

The biopsychosocial approach is a comprehensive model that explains the complex interplay between biological, psychological, and social factors affecting individual health and behavior.

Cultural Definitions

Refers to the meanings, beliefs, and practices that are shared by a specific group of people, contributing to their collective identity.