You Are Considering the Following Two Mutually Exclusive Projects Based on the Net Present Value Method of Analysis and Projects

question 110

Multiple Choice

You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value.
$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Year } & \text { Project A } & \text { Project B } \\\hline 0 & £ 75,000 & £ 70,000 \\\hline 1 & £ 19,000 & £ 10,000 \\\hline 2 & £ 48,000 & £ 16,000 \\\hline 3 & £ 12,000 & £ 72,000 \\\hline\end{array}\\\begin{array} { | l | l | l | } \hline & \text { Project A } & \text { Project B } \\\hline \text { Required rate of return } & 10 \% & 13 \% \\\hline \text { Required payback period } & 2.0 \text { years } & 2.0 \text { years } \\\hline \text { Required accounting return } & 8 \% & 11 \% \\\hline\end{array}\end{array}$
Based on the net present value method of analysis and given the information in the problem, you should:

• A)accept both project A and project B.
• B)accept project A and reject project B.
• C)accept project B and reject project A.
• D)reject both project A and project B.
• E)accept whichever one you want as they represent equal opportunities.

Interpret how risk of loss is determined and managed in sales transactions.

Evaluate the legal outcomes of non-conforming goods and the options available to buyers and sellers.

Comprehend the role and impact of negotiable and non-negotiable documents of title in goods transactions.

Identify conditions under which a title is considered void, voidable, or good.

---

Definitions:

Account Receivable

A financial record of the money owed to a business by its customers for goods or services delivered on credit.

Perpetual Inventory System

An inventory management system that updates item records continuously as transactions occur, providing a real-time view of inventory levels.

Merchandise Returned

Items sent back to the seller by the buyer due to defects, dissatisfaction, or other reasons, often part of a refunds or exchanges process.

FOB Destination

A shipping term indicating that the seller owns the goods in transit and is responsible for freight charges and any damage until the goods are delivered to the buyer’s location.