Required Payback Period: 2

question 79

Multiple Choice

$$\begin{array}{l}\text { You are analyzing a project and have prepared the following data: }\\\begin{array} { | l | l | } \hline \text { Year } & \text { Cash Flow } \\\hline 0 & - £ 169,000 \\\hline 1 & £ 46,200 \\\hline 2 & £ 87,300 \\\hline 3 & £ 41,000 \\\hline 4 & £ 39,000 \\\hline\end{array}\end{array}$$ Required payback period: 2.5 years Required AAR: 7.25%
Required return: 8.50%
Based on the internal rate of return of _____for this project, you should _____ the project.

• A)8.95%; accept
• B)10.75%; accept
• C)8.44%; reject
• D)9.67%; reject
• E)10.33%; reject

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Definitions:

Observational Learning

A learning process through which behavior is acquired by watching and imitating others.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without prior conditioning or learning.

Shaping

A method of training by which successive approximations toward a desired behavior are reinforced.

Partial Reinforcement

A conditioning principle in which a reward or punishment is not administered every time the desired response is performed, leading to more resilient behavior patterns.