A Company Is Considering Two Mutually Exclusive Projects Adept and Boffo.Project

question 53

Multiple Choice

A company is considering two mutually exclusive projects Adept and Boffo.Project Adept requires an initial investment of $100,000 and is expected to generate after-tax cash flows of $45,000 per year for three years.Project Boffo requires an initial investment of $150,000 and is expected to generate after-tax cash flows of $50,000 per year for four years.The appropriate discount rate is 10%.What is the crossover rate for projects Adept and Boffo?

• A)4.06%
• B)7.77%
• C)12.59%
• D)16.65%

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Definitions:

Shareholder Value

The worth delivered to shareholders as a result of the management's ability to grow earnings, dividends, and share price.

Succession/Replacement Table

A succession/replacement table is a tool used by organizations to plan future leadership by identifying and developing individuals to fill key roles in anticipation of retirements or departures.

Talent Management

The ongoing process of attracting, developing, and retaining skilled employees to meet an organization's needs and goals.

Career Management

The ongoing process of setting personal career objectives, planning strategies, and implementing actions to achieve career goals.