Project a Has a Five-Year Life and an Initial Cost

question 292

Multiple Choice

Project A has a five-year life and an initial cost of $1,600 and annual cash flows of $600 per year. Project B also has a five-year life and an initial cost of $2,500 with annual cash flows of $850 per year. Given this information, calculate the IRR cross-over rate.

• A) 12.05%
• B) 12.25%
• C) 12.45%
• D) 12.65%
• E) 12.85%

---

Definitions:

Psychodynamic Therapies

Psychotherapies that attempt to uncover repressed childhood experiences that are thought to explain a patient’s current difficulties.

Biochemical Imbalance

A theory suggesting that imbalances in certain chemicals in the brain can contribute to various mental health disorders.

Person-Centered

An approach in psychology that emphasizes the importance of the individual's own experience and self-discovery in their growth or therapy.

Psychoanalytic

Pertaining to a theory of psychology which emphasizes unconscious psychological processes and childhood influences on behavior.