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

question 101

Multiple Choice

Use the information below to answer the following question(s) .Wet Water Company drills residential and commercial wells.The company is in the process of analyzing the purchase of a new drill.Information on the proposal is provided below:
Note: Other than the initial investment, cash flows are end of period.The working capital is returned at the end of the investment period.
-Soda Manufacturing Company provides vending machines for soft drink manufacturers.The company has been investigating a new piece of machinery for its production department.The old equipment has a remaining life of 1 year and no sales value.The new equipment has a value of $52,650 with a three-year life.The expected additional cash inflows are $25,000 per year, end of year payments.What is the internal rate of return?

• A)24 percent
• B)20 percent
• C)16 percent
• D)12 percent
• E)8 percent

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Definitions:

Overcome

To successfully deal with or gain control over something challenging, such as an obstacle, difficulty, or adversity.

Internal Struggle

The psychological conflict within an individual, often involving competing desires, beliefs, or needs.

Internal Struggle

A personal conflict within an individual, often involving competing values or desires.

Anticipated Threat

An expected or forecasted danger or problem that prompts preparation or preventive measures.