Project a Has a fiVe-Year Life and an Initial Cost

question 402

Multiple Choice

Project A has a five-year life and an initial cost of $2,000 and annual cash flows of $700 per year. Project B also has a five-year life and an initial cost of $3,000 with annual cash flows of $950 per
Year. Given this information, calculate the NPV that the IRR cross-over rate provides.

• A) ($594.16)
• B) ($216.48)
• C) $328.87
• D) $800.00
• E) $1,041.50

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Definitions:

Conditioned Responding

The behavior that results from learning through conditioning, where a neutral stimulus becomes associated with a meaningful stimulus, eliciting a response.

Green Light

A signal used in traffic lights indicating the permission to go or proceed.

Conditioned Responses

Learned reactions or responses to certain stimuli that occur as a result of conditioning, such as in classical and operant conditioning.

Garcia

A reference likely to John Garcia, known for his research on taste aversion learning showing that an organism can learn to avoid a substance after a negative experience.