The Comil Corporation Recently Purchased a New Machine for Its

question 23

Multiple Choice

The Comil Corporation recently purchased a new machine for its factory operations at a cost of $328,325. The investment is expected to generate $115,000 in annual cash flows for a period of four years. The required rate of return is 13%. The old machine has a remaining life of four years. The new machine is expected to have zero value at the end of the four-year period. The disposal value of the old machine at the time of replacement is zero. What is the internal rate of return?

• A) 12%
• B) 13%
• C) 14%
• D) 15%

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Definitions:

Iconic Memory

A type of visual sensory memory that preserves an image of a visual stimulus for a brief period after the stimulus is removed.

Mental Visualization

The process of creating or re-creating images, scenarios, or elements within the mind without direct input from the external senses.

Working Memory

A cognitive system with a limited capacity that is responsible for temporarily holding information available for processing and manipulation.

Explicit Memory

Retention of facts and experiences that we can consciously know and “declare.” (Also called declarative memory.)