Project X Has the Following Cash Flows: C₀ = +2,000

question 66

Multiple Choice

Project X has the following cash flows: C₀ = +2,000, C₁ = -1,150, and C₂ = -1,150. If the IRR of the project is 9.85 percent and if the cost of capital is 12.00 percent, you would

• A)accept the project.
• B)reject the project.

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Definitions:

Investing Activity

Financial operations related to acquiring or disposing of non-current assets, crucial for budgeting and strategic planning of an organization's capital.

Financing Activity

Transactions related to raising capital and repaying investors, including issuing stock, paying dividends, and borrowing funds.

Net Income

A company's overall earnings following the deduction of all costs and taxes from its gross income.

Fiscal Year

A twelve-month period used for accounting purposes and preparation of financial statements, which may not align with the calendar year.