Capricorn Industries Ltd Is Considering Three Mutually Exclusive Projects

question 32

Multiple Choice

Capricorn Industries Ltd is considering three mutually exclusive projects.Their costs and cash flows are: If Capricorn's required rate of return is 14%,which project should the company choose?

• A)Project A
• B)Project B
• C)Project C
• D)None of the projects

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Definitions:

Financing Activities

Transactions related to raising funds for the business, including issuing debt and equity as well as paying dividends.

Net Cash

Represents the total cash earnings minus cash expenses over a period, highlighting the company's ability to generate cash from its operations.

Investing Activities

Investing activities are transactions involving the purchase and sale of long-term assets and other investments not considered as cash equivalents.

Net Cash

The difference between a company's total cash inflows and outflows.