If a business owner is considering whether to borrow money to purchase a new machine that generates a stream of revenue over time, the decision process involves two primary steps. Which one of the following best summarizes the two steps?

Multiple Choice

a)Calculate the internal rate of return on the investment in the machine and then compare that return to the cost of buying the machine.

b)Find out if the bank will approve the loan and then calculate the internal rate of return on the investment in the machine.

c)Secure venture capital to finance the purchase of the machine and then pay dividends from the revenue stream generated.

d)Calculate the internal rate of return on the investment in the machine and then calculate whether the stream of revenue covers the payments on the loan.