You Are Considering an Investment for Which You Require a 14

question 36

Multiple Choice

You are considering an investment for which you require a 14 percent rate of return.The investment costs $61,900 and will produce cash inflows of $26,000 for three years.Should you accept this project based on its internal rate of return? Why or why not?

• A)Yes, because the IRR is 12.51 percent
• B)Yes, because the IRR is 13.65 percent
• C)Yes, because the IRR is 13.67 percent
• D)No, because the IRR is 12.51 percent
• E)No, because the IRR is 13.65 percent

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Definitions:

Organizational Goals

Objectives or targets that a company aims to achieve, which guide its internal strategy and operational decisions.

Formulation

The process of creating or devising a strategy or plan.

Sequential Steps

A series of actions or operations that follow a specific, logical order to achieve a desired outcome.

Procedures

The steps required to get a job done.