A Project Requires an Initial Investment of $389,600

question 79

Multiple Choice

A project requires an initial investment of $389,600.The project generates free cash flow of $540,000 at the end of year 4.What is the internal rate of return for the project?

• A) 138.6%
• B) 38.6%
• C) 8.5%
• D) 6.9%

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Definitions:

Implied Renewal

Suggests the automatic extension of a contract based on certain actions or the lack of termination notice by any party involved.

Lease Term

The duration for which a lease agreement is effective, typically specified in months or years.

Fee Simple Absolute

The most complete ownership of property recognized by law, where the owner has unlimited control over the property and can dispose of it at will.

Parcel

A package or bundle of goods wrapped or packed up; also can refer to an individual plot of land.