A Project Has an Initial Investment of $150,000

question 260

Multiple Choice

A project has an initial investment of $150,000. Its four year cash inflows are estimated to be $50,000 in year 1, $80,000 in years 2 and 3, and $50,000 in year 4. If the rate of return is 12%, calculate the project's Profitability Index.

• A) 1.31
• B) 1.41
• C) 1.51
• D) 1.61
• E) 1.71

Understand the concept of budgeting in different business scenarios.

Calculate activity variances and identify them as favorable or unfavorable.

Prepare flexible budgets based on actual activity levels.

Analyze the financial performance of a company through its activity variances.

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Definitions:

Scientific Evidence

Evidence that is based on scientific research, methods, and experimentation.

Communication Process

The act of transferring information from one place, person, or group to another, involving a sender, message, medium, and recipient.

Psychosocial Needs

The aspects of psychological and social well-being that need to be met to ensure an individual's overall health and quality of life, including emotional support, social interaction, and mental health care.

Working Phase

In therapy or counseling, it's the stage where the client and therapist are actively involved in addressing the client’s issues.