Atlantic, Inc

question 124

Multiple Choice

Atlantic, Inc. is considering a project that is expected to produce the following cash flows over the next five years: $22,500, $27,900, $41,800, $33,000, and $15,000 respectively. Atlantic has
$98,000 available, which is the amount needed to initiate the project. Should Atlantic accept this
Project if the required rate of return is 12%? Why or why not?

• A) No; Atlantic would lose $2,407 in today's dollars if they accept the project.
• B) No; The IRR is 13.47%, which is greater than the required return.
• C) No; The PI is 1.04, which is considered a reject signal.
• D) Yes; Atlantic will make $3,567 in today's dollars if they accept the project.
• E) Yes; The PI is .96, which is considered an acceptance signal.

---

Definitions:

Assimilation

The cognitive process where individuals integrate new information into existing knowledge frameworks or the social process of adjusting to another culture by adopting its practices and norms.

Built-In Mechanism

An innate or inherent feature or function within a biological or mechanical system enabling it to operate effectively.

Light and Darkness

Fundamental aspects of the natural world, describing the presence or absence of visible electromagnetic radiation.

Temperature Fluctuations

Variations in the temperature of an environment or body over time.