You Were Recently Hired by a Firm as a Project

question 2

Multiple Choice

You were recently hired by a firm as a project analyst.The owner of the firm is unfamiliar with financial analysis and wants to know only what the expected dollar return is per dollar spent on a given project.Which financial method of analysis will provide the information that the owner requests?

• A)Internal rate of return
• B)Modified internal rate of return
• C)Net present value
• D)Profitability index
• E)Payback

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Definitions:

Federal Securities Regulation

Federal securities regulation consists of U.S. laws and rules that regulate the creation, registration, purchase, and sale of securities, aimed at protecting investors and ensuring market integrity.

Interstate Commerce

Refers to trade, traffic, or transportation involving the movement of goods, services, money, or persons from one state to another, regulated by the federal government.

Rule 10b-5

A regulation under the Securities Exchange Act of 1934, which prohibits deceit, misrepresentations, and fraud in connection with the purchase or sale of securities.

Registered Security

A financial security whose owner is registered with the issuing company, ensuring the owner's claim to future dividends or proceeds from sales.