Dry-Sand Company Is Considering Investing in a New Project

question 25

Multiple Choice

Dry-Sand Company is considering investing in a new project.The project will need an initial investment of $1,200,000 and will generate $600,000 (after-tax) cash flows for three years.However,at the end of the fourth year,the project will generate -$500,000 of after-tax cash flow due to dismantling costs.Calculate the MIRR (modified internal rate of return) for the project if the cost of capital is 15%.

• A)8.1%
• B)12.6%
• C)28.2%

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Definitions:

Genetic Drift

The process by which allele frequencies in a population change due to chance events, affecting small populations more significantly.

Codon

A sequence of three nucleotides in mRNA that specifies a particular amino acid or termination signal during protein synthesis.

Natural Selection

Natural selection is a mechanism that can lead to adaptive evolution, whereby differences in the phenotypes of individuals cause some of them to survive and reproduce more effectively than others and therefore outcompete them.

Synapomorphy

A characteristic or trait that is shared by two or more taxonomic groups and is derived from their most recent common ancestor, indicating a phylogenetic relationship.