Suppose Your Firm Is Considering Two Mutually Exclusive, Required Projects

question 2

Multiple Choice

Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their risk class is 8 percent, and the maximum allowable payback and discounted payback statistic for the projects are two and three years, respectively.
$$\begin{array}{l}\begin{array} {| l | l | l | l | l | }\hline\text {Time: }&0&1&2&3\\\hline\text {Project A Cash flow:}&-20,000&10,000&30,000&1,000\\\hline\text {Project b Cash flow:}&-30,000&10,000&20,000&50,000\\\hline\end{array}\end{array}$$
Use the NPV decision rule to evaluate these projects; which one(s) should be accepted or rejected?

• A) Accept both A and B
• B) Accept neither A nor B
• C) Accept A, reject B
• D) Reject A, accept B

Understand the role of demand curves in visualizing price and quantity relationships.

Appreciate how legal and ethical considerations impact price setting.

Recognize the importance of estimating customer demand in strategizing marketing and resource allocation.

Examine how specific product characteristics and market dynamics affect demand.

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Definitions:

Sensory Register

The initial storage of memory for a very brief time after an event.

Initial Impression

The first and immediate perception or judgment formed about someone or something.

Working Memory

Information being actively processed by rehearsal systems.

Sensory Memory

The memory of an event that is recorded by sensory neurons that lasts for a very brief time after the event ends.