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Suppose a New Cost-Saving Device Will Forever Generate $1,000 Net

Question 112

Multiple Choice

Suppose a new cost-saving device will forever generate $1,000 net savings per year to a firm.The device costs $10,000.Using the Internal Rate of Return approach,will the firm make the investment?


A) definitely
B) definitely not
C) if the interest rate exceeds 10%
D) if the interest rate is less than 10%

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