Wishlist Recently Purchased a New Packaging Machine for $678,026

question 17

Multiple Choice

Wishlist recently purchased a new packaging machine for $678,026. The machine has a remaining useful life of 10 years. Net cash flow per year will be $120,000. The internal rate of return is:

• A)16%.
• B)20%.
• C)24%.
• D)12%.

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Definitions:

High Market Share

A significant portion of total sales within a particular market or industry, controlled by one company.

Elastic Demand

Refers to a situation where the quantity demanded of a good or service significantly changes in response to a change in its price. High elasticity indicates that consumers are more sensitive to price changes.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good that consumers are willing to purchase.

Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price, income levels, or other factors.