Chasteen, Inc

question 18

Multiple Choice

Chasteen, Inc., is considering an investment with an initial cost of $145,000 that would be depreciated straight-line to a zero book value over the life of the project.The cash inflows generated by the project are estimated at $76,000 for the first two years and $30,000 for the following two years.What is the internal rate of return?

• A)21.44 percent
• B)21.29 percent
• C)17.43 percent
• D)17.55 percent
• E)20.11 percent

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Definitions:

Leisure

Free time when one is not working or attending to other duties, often used for relaxation, entertainment, or hobbies.

Nonlabor Income

Income received that does not come from employment or work, such as investment returns or inheritance.

Wage Rate

The amount of money paid to an employee for a unit of time worked, typically expressed per hour or year.

Leisure

Represents time that an individual spends away from work and other compulsory activities, often used for relaxation, recreation, or personal interests.