Project a and B Have 4 Year Timelines

question 257

Multiple Choice

Project A and B have 4 year timelines. Project A has an initial investment of $120,000 and cash inflows of $50,000, $50,000 $30,000 and $30,000. Project B has an initial investment of $190,000
And cash inflows of $80,000, $70,000, $70,000 and $60,000. At what rate of interest would a
Company be indifferent at choosing project A or B?

• A) 25.77%
• B) 24.66%
• C) 23.55%
• D) 22.44%
• E) 21.33%

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Definitions:

Industrial Union

A labor union organizing method where all workers in the same industry are organized into the same union, regardless of skill or trade.

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The probability that an individual will keep their job; a high level of job security implies a low likelihood of losing one's job.