Midize Flower Company Provides Flowers and Other Nursery Products for Decorative

question 149

Multiple Choice

Midize Flower Company provides flowers and other nursery products for decorative purposes in medium to large sized restaurants and businesses.The company has been investigating the purchase of a new specially equipped van for deliveries.The van has a value of $66,645 with a seven-year life.The expected additional cash inflows are $15,000 per year.What is the internal rate of return?

• A) 10%
• B) 13%
• C) 15%
• D) 20%

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Definitions:

Inflation Rate

The percentage increase in the general price level of goods and services in an economy over a period of time, usually a year.

Market Basket

A selected set of goods and services used to track an economy's inflation or cost of living over time.

CPI

The Consumer Price Index scrutinizes the average price changes of a broad spectrum of consumer items and services, like food, healthcare, and transport, by means of a weighted average calculation.

CPI

By utilizing a weighted average mechanism, the Consumer Price Index monitors the price trajectory of essential consumer goods and services, which includes food, transportation, and medical services.