Yonan Inc Is Considering Projects S and L, Whose Cash Flows

question 7

Multiple Choice

Yonan Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the shorter payback, some value may be forgone. How much value will be lost in this instance? Note that under some conditions choosing projects on the basis of the shorter payback will not cause value to be lost.

• A) $55.16
• B) $66.42
• C) $78.79
• D) $93.16

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Definitions:

Double Fertilization

A unique process in angiosperms where one sperm cell fertilizes an egg cell forming a zygote, and the other sperm cell fuses with two polar nuclei, forming a triploid cell that develops into the endosperm.

Triploid Endosperm

A tissue in the seeds of flowering plants that nourishes the developing embryo, characterized by having three sets of chromosomes.

Diploid Zygote

A fertilized egg cell that has two sets of chromosomes, one set from each parent, representing the first stage in the development of a new individual.

Dioecious Plant

A plant species having male and female reproductive organs on separate individuals.