Hogge Print Shop Is Considering the Purchase of a Used

question 75

Multiple Choice

Hogge Print Shop is considering the purchase of a used printing press costing $38,400.The printing press would generate an annual cash flow of $16,000 for three years.At the end of three years, the press would have no salvage value.The company's cost of capital is 10 percent.The company uses straight-line depreciation with no mid-year convention. What is the internal rate of return to the nearest percent for the press, assuming no taxes are paid?

• A) 10%
• B) 12%
• C) 42%
• D) 8%

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Definitions:

Bureau of Labor Statistics

The Bureau of Labor Statistics is a government agency that collects, analyzes, and disseminates various data related to employment, wages, and other economic indicators in the United States.

Official Unemployment Rate

The percentage of active job seekers within the labor force who are presently without a job.

Imperfect Measure

A term used to describe a metric or means of evaluation that does not capture or reflect all relevant aspects perfectly.

Measuring Unemployment

The process of determining the unemployment rate by identifying the percentage of the workforce that is not currently employed but actively seeking work.