Isaac Has Analyzed Two Mutually Exclusive Projects That Have 3-Year

question 20

Multiple Choice

Isaac has analyzed two mutually exclusive projects that have 3-year lives. Project A has an NPV of $81,406, a payback period of 2.48 years, and an AAR of 9.31 percent. Project B has an NPV of $82,909, a payback period of 2.57 years, and an AAR of 9.22 percent. The required return for Project A is 11.5 percent while it is 12 percent for Project B. Both projects have a required AAR of 9.25 percent. Isaac must make a recommendation and justify it in 15 words or less. What should his recommendation be? 

• A) Accept both projects because both NPVs are positive 
• B) Accept Project A because it has the shortest payback period 
• C) Accept Project B and reject Project A based on the NPVs 
• D) Accept Project A and reject Project B based on their AARs 
• E) Accept Project A because it has the lower required return 

Identify and utilize appropriate method analysis tools and charts for improving production processes.

Comprehend the different incentive systems and their effects on productivity.

Analyze and improve the movement of individuals, materials, and information within the workplace.

Understand the principles and applications of labor standards in determining production expectations and efficiency.

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Definitions:

Stratified Sample

A sampling method that divides the population into subgroups and selects samples from each, ensuring representation.

Cross-sectional Sample

A sample that is taken at one specific point in time from a population to study its characteristics.

Closed Questions

Inquiries that have a predetermined set of potential responses.

Interview Format

The structured or unstructured layout of questions and answers designed for the purpose of gathering information during an interview.