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

question 71

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.
-In what range is the internal rate of return?

• A) 8 percent to 12 percent
• B) 12 percent to 16 percent
• C) 16 percent to 20 percent
• D) 20 percent to 24%
• E) greater than 24%

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Definitions:

Sole Proprietorship

A type of business organization that has one owner. The owner is personally liable for paying the business’s debts.

Visa Card

A branded payment card that allows users to make transactions electronically, withdrawing funds from the cardholder's account.

Company Check

A company check is a check issued by a business from its own account to pay for goods, services, or obligations.

Withdrawals

Amounts of money taken out from a business by its owners for personal use, reducing the owner's equity.