Project a and B Have 4 Year Timelines

question 360

Multiple Choice

Project A and B have 4 year timelines. Project A has an initial investment of $100,000 and cash inflows of $60,000, $50,000 $40,000 and $40,000. Project B has an initial investment of $75,000 and cash inflows of $50,000, $40,000, $30,000 and $30,000. At what rate of interest would a company be indifferent at choosing project A or B?

• A) 17.95%
• B) 19.01%
• C) 21.86%
• D) 23.88%
• E) 24.44%

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Definitions:

Anorexia Nervosa

A psychological disorder marked by an extreme fear of gaining weight, leading to significantly restricted food intake and often excessive weight loss.

Milieu

The physical or social setting in which something occurs or develops; environment.

Pica

A disorder characterized by the persistent ingestion of non-nutritive substances, such as dirt or paper, not typical for one's age or culture.

Hospitalization

The process of admitting a person into a hospital for medical treatment and care.