A Project Has Been Assigned a Required Annual Accounting Return

question 121

Multiple Choice

A project has been assigned a required annual accounting return of 14% and a required discount rate of 9%. The initial cost of the project is $25,000. The project produces annual cash flows of
$9,876 a year for three years. What is the profitability index of this project?

• A) .92
• B) 1.00
• C) 1.03
• D) 1.09
• E) 1.19

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Definitions:

Cognition

The way in which information is processed and manipulated in remembering, thinking, and knowing.

Adolescent Egocentrism

A characteristic of adolescent thinking that leads to self-centered assumptions, such as believing that one's experiences and emotions are unique and not understood by others.

Preoperational Thought

A stage in cognitive development characterized by symbolic thinking, egocentrism, and a lack of understanding of conservation concepts.

Adolescent Identity Crisis

A developmental phase where teenagers question their identity and values, often leading to confusion and emotional turmoil.