Project a Has Cash Flows of −$50,000, $49,400, $27,200, and $24,500

question 73

Multiple Choice

Project A has cash flows of −$50,000, $49,400, $27,200, and $24,500 for Years 0 to 3, respectively. Project B has an initial cost of $50,000 and an annual cash inflow of $18,500 for four years. These are mutually exclusive projects. What is the crossover rate?

• A) 30.89 percent
• B) 16.08 percent
• C) −30.89 percent
• D) Cannot be computed
• E) −16.08 percent

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Definitions:

Structure of Personality

The organized pattern of behaviors and attitudes that distinguishes an individual and that is formed by the integrated components of id, ego, and superego in psychoanalytic theory.

Cattell

Raymond Cattell, a psychologist known for his work in personality, intelligence theory, and factor analysis.

Social Desirability

The tendency of respondents to answer questions in a manner that will be viewed favorably by others.

Discriminant Validity

A form of validity that ensures a test measures what it is supposed to measure, and not something else, by demonstrating little correlation with variables from which it should differ.