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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
1. A company is considering investing in a new machine that requires a cash payment of $15,982 today. The machine will generate annual cash flows of $7,000 for the next three years. What is the internal rate of return if the company buys this machine?
2. Label each of the following statements as either true (“T”) or false (“F”).
a. An opportunity cost is the potential benefit that is lost by taking a specific action when two or more alternative choices are available.
b. A sunk cost will change with a future course of action.
c. An out-of-pocket cost requires a current and/or future outlay of cash.
c. Relevant costs are also known as unavoidable costs.
d. Incremental costs are also known as differential costs.
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