A Planned Factory Expansion Project Has an Estimated Initial Cost

question 138

Multiple Choice

A planned factory expansion project has an estimated initial cost of $800,000.Using a discount rate of 20%,the present value of future cost savings from the expansion is $843,000.To yield exactly a 20% internal rate of return,the actual investment cost cannot exceed the $800,000 estimate by more than which of the following? (Ignore income taxes in this problem.)

• A) $1,075.
• B) $20,000.
• C) $43,000.
• D) $160,000.

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Definitions:

Lower Intelligence

Described as below-average cognitive ability, including difficulties with problem-solving, learning, and adapting to new situations.

Spinal Column

The flexible, bony structure running down the middle of the back, which provides support and protects the spinal cord.

Less Dense

Refers to materials having a lower mass per unit of volume, indicating fewer particles or less mass in a given space.

Back Pain

A common physical discomfort or ailment affecting the lumbar, thoracic or cervical regions of the spine, often due to strain, injury or other health conditions.