MacNamara Development Company Is Evaluating a Possible Investment in a Construction

question 103

Multiple Choice

MacNamara Development Company is evaluating a possible investment in a construction project. The cost will be $100,000, and it will generate cash flows as follows:
$$\begin{array} { | r | r | } \hline \text { Year 1 } & \$ 10,000 \\\hline \text { Year 2 } & \$ 20,000 \\\hline \text { Year 3 } & \$ 30,000 \\\hline \text { Year 4 } & \$ 40,000 \\\hline \text { Year 5 } & \$ 35,000 \\\hline\end{array}$$
The VP for construction believes this project has an internal rate of return somewhere in the range of 7% to 10%, but has asked the Controller to crunch the numbers. Using the trial and error method, and the PV factors shown here, determine what the IRR of this project is.
$\begin{array}{|c|c|c|c|c|c|c|}\hline \text {Present Value of}\\ \text {an Annuity of }\\\$1\\\hline&5\%&6\%&7\%&8\%&9\%&10\%\\\hline1 & 0.952& 0.943 & 0.935 & 0.926 & 0.917 & 0.909 \\\hline 2& 0.907 & 0.890 & 0.873 & 0.857 & 0.847 & 0.826 \\\hline 3& 0.864 & 0.840 & 0.816 & 0.794 & 0.771 & 0.751 \\\hline 4& 0.823 & 0.792 & 0.763 & 0.735 & 0.708 &0.683 \\\hline 5& 0.784 & 0.747 & 0.713 & 0.681 & 0.650 &0.621 \\\hline\end{array}$

Choose the rate below which comes closest to the actual IRR.

• A) 7%
• B) 8%
• C) 9%
• D) 10%

Differentiate between various types of religious groups (e.g., sects, churches, denominations, ecclesia).

Recognize the contributions of key sociological theorists to the study of religion (e.g., Weber, Durkheim, Marx).

Understand the market model of religion and its implications for religious diversity and competition.

Describe how religious beliefs and practices are acquired and transmitted across generations.

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Definitions:

Corporation Social Responsibility

Practices and policies undertaken by corporations to positively impact societal, environmental, and economic domains.

Corporate Profits

The earnings of a corporation after all expenses, taxes, and costs have been deducted from total revenue.

Consumer Preferences

The subjective tastes and desires influencing the choices that consumers make among various products and services.

Occupational Safety and Health Act

A law enacted to ensure safe and healthful working conditions for employees by setting and enforcing standards and providing training, outreach, education, and assistance.