Glades Thread Company Is Evaluating an Investment That Will Cost

question 109

Multiple Choice

Glades Thread Company is evaluating an investment that will cost $520,000 and will yield cash flows of $300,000 in the first year,$200,000 in the second year,and $100,000 in the third and the final year.Use the table below and determine the internal rate of return.
Present value of $1:
The IRR of the project will be ________.

• A)between 9% and 10%
• B)less than 8%
• C)less than 9%,more than 8%
• D)more than 10%

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Definitions:

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory over a given period.

Inventory Balance

The total value of all the goods and materials held by a company as stock, intended for sale or production.

COGS Formulation

COGS formulation involves calculating the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Cash Collections

The process of gathering and managing the cash payments received from customers or clients.