Project a Has a Cost of $300 and a Three

question 372

Multiple Choice

Project A has a cost of $300 and a three year annual cash flow of $100, $200 and $300. Project B has a cost of $400 and a three year annual cash flow of $185, $215 and $315. Given this
Information, calculate the IRR cross-over rate.

• A) 6.77%
• B) 7.77%
• C) 8.77%
• D) 9.77%
• E) 10.77%

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Definitions:

Socially Responsible

Pertains to businesses or individuals acting in a way that benefits society and the environment, beyond legal requirements.

Corporate Actions

Activities undertaken by a corporation's management that have substantial impacts on the company's stakeholders, including actions like mergers, acquisitions, share splits, and dividend payments.

Social Responsibility Strategy

A plan of action for a business that aims to contribute positively to society, considering the impact of its operations on environmental and social well-being.

Classical Economic

An economic theory originating in the 18th century that advocates for free markets, competition, and the idea that an invisible hand guides supply and demand.