Use the Information for the Question(s)below

question 73

Multiple Choice

Use the information for the question(s) below.
The Sisyphean Company is planning on investing in a new project.This will involve the purchase of some new machinery costing $450,000.The Sisyphean Company expects cash inflows from this project as detailed below:
The appropriate discount rate for this project is 16%.
-The internal rate of return (IRR) for this project is closest to:

• A)18.9%
• B)22.7%
• C)34.1%
• D)39.1%
• E)42.3%

---

Definitions:

Straight-Line Depreciation

A depreciation method where an asset's cost is evenly distributed over its expected lifespan.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period.

Capital Budgeting

The process of making long-term planning decisions for investment projects, evaluating their potential profitability and financial impact.

Straight-Line Depreciation

A method of calculating depreciation by evenly spreading the cost of an asset over its useful life.