A Firm Is Evaluating Two Independent Projects Utilizing the Internal

question 9

Multiple Choice

A firm is evaluating two independent projects utilizing the internal rate of return technique.Project X has an initial investment of $80,000 and cash inflows at the end of each of the next five years of $25,000.Project Z has a initial investment of $120,000 and cash inflows at the end of each of the next four years of $40,000.The firm should:

• A) accept both if their cost of capital is 15% at the maximum.
• B) accept only Z if their cost of capital is 15% at the maximum.
• C) accept only X if their cost of capital is 15% at the maximum.
• D) reject both if their cost of capital is 12% at the maximum.

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Definitions:

Photoreceptor

Sensory receptor that is sensitive to light—for example, rods and cones of the retina.

Lens Flattens

A process where the lens of the eye changes shape, becoming less curved, to focus distant objects clearly onto the retina.

Ciliary Muscles

Ring-shaped muscles located in the eye that control the shape of the lens to focus on objects at varying distances.

Pupil Diameter

The size of the opening in the center of the iris of the eye, which varies to regulate the amount of light reaching the retina.