Tedder Mining Has Analyzed a Proposed Expansion Project and Determined

question 93

Multiple Choice

Tedder Mining has analyzed a proposed expansion project and determined that the internal rate of return is lower than the firm desires.Which one of the following changes to the project would be most expected to increase the project's internal rate of return?

• A)decreasing the required discount rate
• B)increasing the initial investment in fixed assets
• C)condensing the firm's cash inflows into fewer years without lowering the total amount of those inflows
• D)eliminating the salvage value
• E)decreasing the amount of the final cash inflow

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Definitions:

Marginal Utility

The extra pleasure or advantage gained from consuming an additional unit of a product or service.

Total Utility

The complete satisfaction or pleasure a consumer derives from consuming a particular quantity of goods or services.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget and prices.

Product Prices

The amount of money required to purchase a good or service, determined by various factors including production costs, demand, supply, and market competition.