Project a and B Have 4 Year Timelines

question 199

Multiple Choice

Project A and B have 4 year timelines. Project A has an initial investment of $100,000 and cash inflows of $60,000, $50,000 $40,000 and $40,000. Project B has an initial investment of $75,000
And cash inflows of $50,000, $40,000, $30,000 and $30,000. At what rate of interest would a
Company be indifferent at choosing project A or B?

• A) 17.95%
• B) 19.01%
• C) 21.86%
• D) 23.88%
• E) 24.44%

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Definitions:

Present

The period of time that is currently occurring, in contrast to the past or future.

Past

The period of time that has already occurred, in contrast with the present and the future.

Future

Pertains to the time or a period that is to come which is beyond the present moment.

Unconscious Mind

A part of the mind that is not within the individual's conscious awareness, containing thoughts, memories, and desires that influence behavior without our realizing.