Five Mutually Exclusive Projects Had the Following Information Which Project Is Preferred?
A)Project a
B)Project B
C)Project C

question 117

Multiple Choice

Five mutually exclusive projects had the following information: $$\begin{array} { l c c c c c } & \mathrm { A } & \mathrm { B } & \mathrm { C } & \mathrm { D } & \mathrm { E } \\\mathrm { NPV } & \$ 200 & \$ 400 & \$ 2,000 & \$ 1,000 & \$ ( 400 ) \\\text { IRR } & 11 \% & 13 \% & 10 \% & 12 \% & 8 \%\end{array}$$ Which project is preferred?

• A)Project A
• B)Project B
• C)Project C
• D)Project D

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Definitions:

Break-Even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net loss or gain.

Insurance Premiums

Regular payments made to an insurance company to maintain insurance coverage for health, life, property, or other policies.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain range or period.

Break-even Point

The production level or sales volume at which total revenues equal total expenses, leading to no profit or loss.