Grace Corp

question 30

Multiple Choice

Grace Corp. ,whose required rate of return is 10%,is considering the purchase of a new piece of equipment.The internal rate of return of the project,which has a life of 8 years,is 12%.The project would have:

• A)an accounting rate of return greater than 10%.
• B)a payback period more than 8 years.
• C)a net present value of zero.
• D)a net present value greater than zero.

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Definitions:

Operational Ambiguity

The uncertainty or lack of clarity in the operational aspects of a business, which can arise from complex or unclear procedures, objectives, or roles.

Mutually Exclusive Projects

Situations where the acceptance of one project results in the rejection of another project due to constraints such as budget or resources.

Economic Resource

Assets or inputs that can be used in the production or offering of goods and services that have economic value.