Lobel Machines Company Is Evaluating an Investment of $1,100,000 Which

question 41

Multiple Choice

Lobel Machines Company is evaluating an investment of $1,100,000 which will yield net cash inflows of $197,062 per year for 7 years with no residual value.What is the internal rate of return? Present value of ordinary annuity of $1:
$$\begin{array} { | c | c | c | c | c | } \hline & 5 \% & 6 \% & 7 \% & 8 \% \\\hline 1 & 0.952 & 0.943 & 0.935 & 0.926 \\\hline 2 & 1.859 & 1.833 & 1.808 & 1.783 \\\hline 3 & 2.723 & 2.673 & 2.624 & 2.577 \\\hline 4 & 3.546 & 3.465 & 3.387 & 3.312 \\\hline 5 & 4.329 & 4.212 & 4.100 & 3.993 \\\hline 6 & 5.076 & 4.917 & 4.767 & 4.623 \\\hline 7 & 5.786 & 5.582 & 5.389 & 5.206 \\\hline 8 & 6.463 & 6.21 & 5.971 & 5.747 \\\hline 9 & 7.108 & 6.802 & 6.515 & 6.247 \\\hline 10 & 7.722 & 7.36 & 7.024 & 6.71 \\\hline\end{array}$$

• A)5%
• B)6%
• C)7%
• D)8%

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Definitions:

Collectivist Nature

The tendency of cultures or organizations to prioritize the group over individual achievements or desires.

Decision-Making Processes

The series of steps or stages involved in selecting a course of action from among multiple alternatives, typically involving problem identification, analysis, and choosing an option.

Effective Management

The ability of leaders and managers to achieve organizational goals efficiently and effectively through planning, organizing, leading, and controlling resources.

Individualistic Culture

A societal or organizational culture that emphasizes personal freedom, autonomy, and individual achievement over collective goals and cohesion.