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(Ignore Income Taxes in This Problem -
the Internal Rate of Return on the Investment Is

Question 53

Multiple Choice

(Ignore income taxes in this problem.) Chow Company has gathered the following data on a proposed investment project: Investment required in equipment. £142,500Annual cash inflows. £30,000Salvage value. £0 Life of the investment.  8 years Required rate of return. 10%\begin{array}{lr} \text {Investment required in equipment. } &£ 142,500\\ \text {Annual cash inflows. } &£ 30,000\\ \text {Salvage value. } &£ 0 \\ \text { Life of the investment. } & \text { 8 years}\\ \text { Required rate of return. } &10 \%\\\end{array}

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The internal rate of return on the investment is closest to


A) 13%.
B) 15%.
C) 14%.
D) 12%.

Correct Answer:

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