Brookfield Heavy Equipment Is Considering a Project That Will Produce

question 41

Multiple Choice

Brookfield Heavy Equipment is considering a project that will produce after tax cash of $40,000 per year for 5 years. The project will require an initial investment of $144,191. At what discount rate will the project reach break-even NPV?

• A) 8%
• B) 10%
• C) 12%
• D) 11.11%

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Definitions:

Capitalist System

An economic system based on private ownership of the means of production and their operation for profit, characterized by competition, a market economy, and private property rights.

Fourteenth Amendment

An amendment to the U.S. Constitution, ratified in 1868, that granted citizenship to all persons born or naturalized in the United States, including former slaves, and guaranteed all citizens equal protection of the laws.

Laissez-Faire

An economic philosophy of free-market capitalism that opposes government intervention.

Oliver Wendell Holmes

A prominent American jurist and Supreme Court Justice known for his contributions to legal theory and the development of American common law.