ABC Corp Is Considering an Investment Project That Costs $500 Today

question 73

Multiple Choice

ABC Corp. is considering an investment project that costs $500 today. It expects the project will yield income of $200 at the end of years 1, 2, and 3. If the interest rate is 10%, the firm

• A) should undertake the investment.
• B) should forgo the investment.
• C) is just indifferent between undertaking the investment and not.
• D) indeterminate from the given information

---

Definitions:

Counseling Psychology

A branch of psychology that assists people with problems in living (often related to school, work, or marriage) and in achieving greater well-being.

Helping Profession

Career paths that are focused on improving the well-being of others, such as healthcare, education, and social work.

Marriage

A legally and socially sanctioned union between individuals that establishes rights and obligations between them and their children.

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have foreseen or predicted the outcome, often referred to as the "I-knew-it-all-along" effect.