Figure 3 Glady, Inc., Is Considering the Purchase of Production Equipment That

question 45

Multiple Choice

Figure 3
Glady, Inc., is considering the purchase of production equipment that costs £800,000. The equipment is expected to generate annual cash inflows of £250,000. The equipment is expected to have a useful life of five years with no salvage value. The firm's cost of capital is 14 percent.
-Refer to Figure 3. The approximate internal rate of return of Glady's project is

• A) 16%
• B) 20%
• C) 24%
• D) 25%

---

Definitions:

Inflexible

Not capable of or willing to change; rigid in opinions or ways of doing things.

Unexpected Issue

Refers to an unforeseen problem or challenge that arises suddenly and requires immediate attention and resolution.

Recess

A break period, often in the context of schools or formal meetings, designated for rest or informal activities.

Single-issue Negotiations

A negotiation approach focused on resolving one specific issue or topic.