Below Is a Table for the Present Value of $1

question 92

Multiple Choice

Below is a table for the present value of $1 at Compound interest. Below is a table for the present value of an annuity of $1 at compound interest.
Using the tables above, what would be the internal rate of return of an investment that required an investment of $189,550, and would generate an annual cash inflow of $50,000 for the next 5 years?

• A) 6%
• B) 10%
• C) 12%
• D) cannot be determined from the data given.

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Definitions:

Operating Costs

Expenses associated with the day-to-day functionalities of a business, including costs for materials, labor, and overhead.

Scrap Value

The estimated residual value of an asset at the end of its useful life.

Manufacture Further

The process of conducting additional production activities intended to enhance the value or functionality of a product.

Incremental Cost

The additional cost associated with producing one more unit of a product or service.