A Firm Is Considering a Project Requiring an Investment of $200,000

question 48

Multiple Choice

A firm is considering a project requiring an investment of $200,000. The project would generate an annual cash flow of $55,478 for the next five years. The company uses the straight-line method of depreciation with no mid-year convention. Ignore income taxes. The approximate internal rate of return for the project is

• A)9%.
• B)10%.
• C)12%.
• D)16%.

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