Suppose a New Cost-Saving Device Will Forever Generate $1,000 Net

question 112

Multiple Choice

Suppose a new cost-saving device will forever generate $1,000 net savings per year to a firm.The device costs $10,000.Using the Internal Rate of Return approach,will the firm make the investment?

• A) definitely
• B) definitely not
• C) if the interest rate exceeds 10%
• D) if the interest rate is less than 10%

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Definitions:

Experience

The knowledge or skill acquired through direct observation or participation in events or activities.

Imitating Behaviour

is the act of copying the actions, attitudes, or mannerisms of another individual or group, often as a way to learn or fit in socially.

Shaping

A process in psychology where desired behavior is taught by reinforcing any steps that are closer to the target behavior.

Stimulus Assimilation

The process by which individuals integrate new information into their existing knowledge or frameworks.