Two Projects Each Require a Current Cash Expenditure of $10,000

question 19

Multiple Choice

Two projects each require a current cash expenditure of $10,000.Project A will generate cash inflows of $2,000 per year for the next twelve years.Project B is expected to return $6,000 in 1 year,$4,000 at the end of year 2,and $3,000 in 3 years.Which project should be selected if funds are unavailable to finance both and capital costs are 6%?

• A) Project B because it has a shorter payback period.
• B) Project B because it has a higher IRR
• C) Project A because it has a higher IRR
• D) Project A because it has a higher NPV
• E) Project B because it has a higher NPV

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Definitions:

Points-Of-Difference

A type of value proposition that focuses on the product or service relative to the competition and how the offering is different from others on the market.

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A high-end dining establishment specializing in Chinese cuisine, typically characterized by premium prices and quality.

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The character and atmosphere of a place, which contributes to its overall impression and experience.