Nobell Company Is Evaluating an Investment of $1,000,000 Which Will

question 76

Multiple Choice

Nobell Company is evaluating an investment of $1,000,000 which will yield net cash inflows of $142,369 per year for 10 years with no residual value. What is the internal rate of return? Present value of annuity of $1:
$\begin{array}{|r|r|r|r|r|} \hline& 5 \% & 6 \% & 7 \% & 8 \% \\\hline 1 & 0.952 & 0.943 & 0.935 & 0.926 \\\hline 2 & 1.859 & 1.833 & 1.808 & 1.783 \\\hline 3 & 2.723 & 2.673 & 2.624 & 2.577 \\\hline 4 & 3.546 & 3.463 & 3.387 & 3.312 \\\hline 5 & 4.329 & 4.212 & 4.1 & 3.993 \\\hline 6 & 5.076 & 4.917 & 4.767 & 4.623 \\\hline 7 & 5.786 & 5.582 & 5.389 & 5.206 \\\hline 8 & 6.463 & 6.21 & 5.971 & 5.747 \\\hline 9 & 7.108 & 6.802 & 6.515 & 6.247 \\\hline 10 & 7.722 & 7.36 & 7.024 & 6.71\\\hline\end{array}$

• A) 6%
• B) 7%
• C) 8%
• D) 9%

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Definitions:

TPS

A Transaction Processing System is an information system designed to gather, store, alter, and recover an organization's transaction data.

PLM

Product Lifecycle Management, a systematic approach to managing the series of changes a product goes through, from its design and development to its ultimate disposal.

CIM

Computer-Integrated Manufacturing, an approach to manufacturing that involves the use of computers to control the entire production process, from design and manufacturing to product delivery.

MRP

Material Requirements Planning; a system for efficiently managing manufacturing processes, including inventory control, production planning, and scheduling.