The Tool Box Needs to Purchase a New Machine Costing

question 42

Multiple Choice

The Tool Box needs to purchase a new machine costing $1.46 million.Management is estimating the machine will generate cash inflows of $223,000 the first year and $600,000 for the following three years.If management requires a minimum 12 percent rate of return,should the firm purchase this particular machine based on its IRR? Why or why not?

• A)Yes, because the IRR is 10.75 percent
• B)Yes, because the IRR is 12.74 percent
• C)No, because the IRR is 10.75 percent
• D)No, because the IRR is 12.74 percent
• E)The answer cannot be determined as there are multiple IRRs

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Definitions:

Neurotrophic Factor

A type of protein that supports growth, survival, and differentiation of developing and mature neurons.

Depression

A mental health disorder characterized by persistent feelings of sadness, loss, or anger that interfere with daily activities.

Substantia Nigra

A region of the midbrain that plays an important role in movement and coordination; it is notably affected in patients with Parkinson's disease.

Dopamine Levels

The concentration of dopamine, a neurotransmitter associated with pleasure and reward, within the brain.