(Ignore Income Taxes in This Problem The Internal Rate of Return Is Closest To:
A) 12

question 13

Multiple Choice

(Ignore income taxes in this problem.) The following data pertain to an investment project:
$\begin{array}{lr}\text {Investment required. }&\$ 34,055\\\text {Annual savings }&\$ 5,000\\\text {Life of the project. }&15 \text { years }\\\end{array}$
The internal rate of return is closest to:

• A) 12%
• B) 14%
• C) 10%
• D) 8%

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Definitions:

Small Firms

Businesses that operate on a smaller scale than larger enterprises, often characterized by fewer employees and lower income or revenue.

Large Firms

Enterprises or corporations that operate on a large scale, typically having significant market power, resources, and complex organizational structures.

Scale of Production

Refers to the size of the operation or the volume of output produced by a business or manufacturing plant.

Average Total Cost

Average Total Cost is the total cost of production divided by the total quantity produced, representing the per unit cost of production.