A Firm Is Considering Three Projects

question 300

Multiple Choice

A firm is considering three projects. Each costs $1 million now. Project A will yield $400,000 a year for three years, beginning one year from now. Project B will yield $1.25 million three years from now, and Project C will yield $600,000 for two years, beginning two years from now. If the interest rate is 8 percent, which of these projects should the firm undertake?

• A) Project A.
• B) Project B.
• C) Project C.
• D) None of these.

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Definitions:

President Veto

A power granted to the President to reject bills passed by both houses of Congress, necessitating a two-thirds majority in both houses to override the veto.

Democratic Leadership

A leadership style where decision-making is shared among the group, encouraging participation and empowerment of followers.