You Are Considering Two Mutually Exclusive Projects with the Following

question 293

Multiple Choice

You are considering two mutually exclusive projects with the following cash flows. Which project(s) should you accept if the discount rate is 7 %? What if the discount rate is 10 %?

• A) Accept project A as it always has the higher NPV.
• B) Accept project B as it always has the higher NPV.
• C) Accept A at 7 % and B at 10 %.
• D) Accept B at 7 % and A at 10 %.
• E) Accept A at 7 % and neither at 10 %.

Recognize the components and support documents of a voucher system.

Comprehend the necessity of cash control measures for protecting against theft and misuse.

Analyze bank reconciliation components to adjust the book and bank balances.

Apply knowledge of miscellaneous bank transactions (NSF checks, bank service charges) in reconciling and recording in company books.

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Definitions:

Time Horizon

The length of time over which an investment is expected to be held or a financial goal is to be achieved.

Standard Deviation

A measure of the dispersion or variability in a dataset, commonly used in finance to assess the volatility of an asset's returns over time.

Volatility

is a statistical measure of the dispersion of returns for a given security or market index, often used as a measure of risk.

Normal Distribution

A probability distribution that is symmetric around the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.