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

question 387

Multiple Choice

Project A has a five-year life and an initial cost of $2,000 and annual cash flows of $700 per year. Project B also has a five-year life and an initial cost of $3,000 with annual cash flows of $950 per year. Given this information, calculate the IRR cross-over rate.

• A) 5.93%
• B) 6.93%
• C) 7.93%
• D) 8.93%
• E) 9.93%

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Definitions:

Personality Disorders

Mental health conditions characterized by enduring patterns of behavior, cognition, and inner experience that deviate markedly from the expectations of the individual's culture, are pervasive and inflexible, and lead to distress or impairment.

Maladaptive Pattern

Behavior patterns that are counterproductive to an individual's well-being or ability to fulfill goals and adapt to the demands of life.

Rigid

Lacking flexibility; not able to be bent or easily adapted to changes in circumstance or perspective.

Antisocial Personality

A mental condition characterized by a long-term pattern of manipulating, exploiting, or violating the rights of others, often associated with criminal behavior.