Examlex

Solved

Use the Following Information to Answer the Next Question(s)

question 37

Multiple Choice

Use the following information to answer the next question(s) .
Sunny Flowers is considering the purchase of a small business that costs $500,000. Sunny plans to sell stock valued at $250,000. The stock would pay dividends of $20,000 per year. Sunny would borrow the remaining $250,000 from a local bank at 12 percent interest.
The business is expected to generate annual cash inflows of $80,000. Duane plans to operate the business for 15 years and then turn it over to his son.
-The approximate internal rate of return of the project is


Definitions:

Recycling Revenue

Earnings derived from the gathering, processing, and sale of recyclable materials.

Processing Cost

The expenses involved in changing raw materials into finished products, including labor, materials, and overhead.

Disposal Cost

Expenses associated with getting rid of waste materials or unwanted products.

Corporate Responsibility

An approach by businesses to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices.

Related Questions