As the Capital Budgeting Director for Chapel Hill Coffins Company

question 71

Multiple Choice

As the capital budgeting director for Chapel Hill Coffins Company, you are evaluating construction of a new plant. The plant has a net cost of $5 million in Year 0 (today) , and it will provide net cash inflows of $1 million at the end of Year 1, $1.5 million at the end of Year 2, and $2 million at the end of Years 3 through 5. Within what range is the plant's IRR?

• A) 14 - 15%
• B) 15 - 16%
• C) 16 - 17%
• D) 17 - 18%
• E) 18 - 19%

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Definitions:

Fast-Growing

Describing organisms, businesses, or phenomena that expand or increase in size, scope, or number quickly over a short period.

Sustainable Agriculture

Farming practices that balance the need for food production with the preservation of environmental quality and the economic viability of farms.

Agroecology

An integrative science that applies ecological concepts and principles to the design and management of sustainable agricultural systems.

Organic Farming

An agricultural method that involves growing and nurturing crops without the use of synthetic pesticides, fertilizers, or genetically modified organisms.