Kannan Enterprise Has a Project with an Initial Outlay of $40,000,followed

question 10

Multiple Choice

Kannan Enterprise has a project with an initial outlay of $40,000,followed by three years of annual incremental cash flows of $35,000.The terminal cash flow of the project is $10,000.Assuming a discount rate of 10%,which of the following is the correct equation to solve for the IRR of the project?

• A)$40,000 = $35,000(1.12)¹ + $35,000(1.12)² + $45,000(1.12)³
• B)$40,000 = $35,000(1 + IRR)¹ + $35,000(1+IRR)² + $45,000(1+IRR)³
• C)$40,000 = $35,000/(1.12)^IRR + $35,000/(1.12)^IRR + $45,000/(1.12)^IRR
• D)$40,000 = $35,000(1+IRR)^-1 + $35,000(1.IRR)^-2 + $45,000(1+IRR)^-3

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Definitions:

Reformulated Path-Goal Theory

An evolved theoretical framework that emphasizes how leaders can enhance follower performance and satisfaction by aligning leadership style with situational factors.

Inherent Trait Approach

The perspective that leadership capabilities are natural qualities that individuals are born with.

Group-Oriented Decision Process

A decision-making methodology that involves the input and consensus of the group to reach a collective decision.

Path-Goal Theory

A leadership theory that suggests leaders should adjust their leadership style based on the situation to help followers achieve their goals.