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

question 96

Multiple Choice

Use the information below to answer the following question(s) .Neptune Ltd.wants to expand its operations by manufacturing a new product line.New equipment will cost $225,000.Incremental sales are estimated at $150,000 per year for 6 years.Variable costs of producing the new product line are 52% of sales and incremental annual fixed costs are $25,000.The equipment can be salvaged after 6 years for 16% of its original cost.The company's required rate of return for new projects is 18%.Ignore income taxes.
-What is the internal rate of return of the Neptune Ltd.investment?

• A)13.62%
• B)12.75%
• C)10.00%
• D)6.86%
• E)18.00%

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The act of striking the buttocks with an open hand as a form of punishment or discipline.

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An unexpected piece of information that is surprising or startling to learn.

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