A Proposed Project Has an Initial Cost of $38,000 and Cash

question 31

Multiple Choice

A proposed project has an initial cost of $38,000 and cash inflows of $12,300, $24,200, and $16,100 for Years 1 through 3, respectively. The required rate of return is 16.8 percent. Based on IRR, should this project be accepted? Why or why not?

• A) No; The IRR exceeds the required return.
• B) No; The IRR is less than the required return.
• C) Yes; The IRR exceeds the required return.
• D) Yes; The IRR equals the required return.
• E) No; The IRR equals the required return.

---

Definitions:

Executive Branch

The branch of government responsible for implementing and enforcing laws, headed by the President and including departments and agencies that administer government functions.

Federal Government

The national government of the United States, which operates according to principles outlined in the U.S. Constitution, comprising three branches: executive, legislative, and judicial.

State of Emergency

A governmental declaration that temporarily enhances powers to the executive branch to manage emergencies or disasters.

Joint Resolution

A legislative measure passed by both the Senate and the House of Representatives, which, upon presidential approval, has the force of law.