Camtash Corporation Is Considering the Purchase of a Machine That

question 109

Multiple Choice

Camtash Corporation is considering the purchase of a machine that would cost $21,628 and would have a useful life of 5 years. The machine would generate $6,300 of net annual cash inflows per year for each of the 5 years of its life. The internal rate of return on the machine would be closest to

• A) 8%.
• B) 10%.
• C) 12%.
• D) 14%.

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Definitions:

Ability-Based Attributions

Attributing someone's behavior or performance to their inherent capabilities or skills rather than external factors.

Correspondent Inference

A theory suggesting that people infer a correspondent disposition or personality trait from an observed behavior that is freely chosen and leads to distinctive results.

Entity Mind-Set

An outlook where abilities are viewed as fixed and unchangeable traits, influencing motivation and approach to challenges.

Incremental Mind-Set

A belief that abilities can be developed through dedication and hard work, which fosters a love of learning and resilience.