Suppose Your Firm Is Considering Two Mutually Exclusive, Required Projects

question 69

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 PI 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 legal and persuasive elements of proposals.

Understand different types of bonds such as registered, serial, and collateral bonds.

Comprehend the concept and characteristics of bearer bonds.

Grasp the definition and application of an annuity in financial contexts.

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Definitions:

Legal Limits

Regulations or laws that define the boundaries within which individuals or organizations can operate or conduct activities.

Lethal Limits

The boundaries or levels beyond which survival is not possible due to environmental or physical conditions.

Automated Threat Assessments

The use of automated systems to evaluate and identify potential security threats without the need for manual intervention.

Machine Learning

is a branch of artificial intelligence that focuses on building systems that learn from data, automatically improving and adapting without being explicitly programmed.