Use the Information for the Question(s)below

question 36

Multiple Choice

Use the information for the question(s) below.
Boulderado has come up with a new composite snowboard.Development will take Boulderado four years and cost $250,000 per year,with the first of the four equal investments payable today upon acceptance of the project.Once in production the snowboard is expected to produce annual cash flows of $200,000 each year for 10 years.Boulderado's discount rate is 10%.
-The IRR for Boulderado's snowboard project is closest to:

• A)10.4%.
• B)10.0%.
• C)11.0%.
• D)15.1%.

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Definitions:

Subtract Fractions

The operation of taking one fraction away from another, which involves finding a common denominator and then subtracting the numerators.

Simplest Form

Simplest form refers to expressing a mathematical expression or fraction in its most reduced terms, with no common factors between the numerator and the denominator.

Multiplicative Inverse

Another term for reciprocal; a number which, when multiplied by the original number, yields the multiplicative identity (1).

Negative Integer

An integer less than zero, represented by a negative sign (-) in front of a positive number.