The Following Data Are Available on a Proposed Investment Project

question 55

Multiple Choice

The following data are available on a proposed investment project: $\begin{array} { l r } \text { Initial Investment } & \$ 142,500 \\\text { Annual Cash Inflows } & \$ 30,000 \\\text { Life of the Investment. } & 8 \text { years } \\\text { Required Rate of Return } & 10 \%\end{array}$ Which of the following statements best describes the internal rate of return on the proposed investment project? (Ignore income taxes in this problem.)

• A) It is between 11% and 12%.
• B) It is between 12% and 13%.
• C) It is between 13% and 14%.
• D) It is less than the required rate of return.

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