You Are Considering the Following Two Mutually Exclusive Projects with the Following

question 150

Multiple Choice

You are considering the following two mutually exclusive projects with the following cash flows. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value. You should _____ Project A and _____ Project B based on the payback period of each project.

• A) accept; accept
• B) accept; reject
• C) reject; accept
• D) reject; reject
• E) The payback method should not be used to determine which of these projects should be accepted.

---

Definitions:

Stratificatory Differentiation

involves the division of society into layers or strata based on variables such as wealth, power, and prestige.

Vertical Differentiation

Refers to the process of ranking various products, services, or individuals based on quality or prestige rather than quantity or access.

Structural Functionalism

A sociological perspective that views society as a complex system whose parts work together to promote solidarity and stability.

Functional Differentiation

A concept in sociology and systems theory that describes the process by which social systems evolve by differentiating specific subsystems to handle specific functions or tasks.