Modern Refurbishing Inc $\begin{array} { l c c c c c } \text { Year } & 0 & 1 & 2 & 3 & 4 \\\text { Cash flows } & - \$ 850 & 300 & 290 & 280 & 270\end{array}$

question 13

Multiple Choice

Modern Refurbishing Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the cost of capital (and even negative) , in which case it will be rejected.
$\begin{array} { l c c c c c } \text { Year } & 0 & 1 & 2 & 3 & 4 \\\text { Cash flows } & - \$ 850 & 300 & 290 & 280 & 270\end{array}$

• A) 13.13%
• B) 14.44%
• C) 15.89%
• D) 17.48%
• E) 19.22%

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Definitions:

Sole Proprietorships

A business owned and operated by a single individual with no distinction between the business and owner.

Tax Advantage

Financial benefits that apply to certain accounts or investments which are provided to encourage specific behaviors, such as saving for retirement. These advantages can lead to a reduction in tax liability.

Personal Liabilities

Debts or obligations that an individual is responsible for, as opposed to those belonging to businesses or governmental entities.

Limited Partners

Investors in a partnership who have limited liability to the extent of their investment in the partnership. They do not partake in the day-to-day management of the business.