A Project Involves a Substantial Expenditure Right Now, and Is

question 2

Multiple Choice

A project involves a substantial expenditure right now, and is expected to yield a return of $X ten years in the future. We expect the annual inflation rate to be positive over the next ten years. Four analysts calculate the present worth of the project. Alice bases her calculation on the assumption that X is given in real dollars, using a real MARR. Bob also assumes that X is in real dollars, but uses the actual MARR to calculate present worth. Cecil assumes that X is in actual dollars, and calculates present worth using the real MARR. Donna also assumes that X is in actual dollars, and calculates present worth using the actual MARR. Who comes up with the highest figure for present worth?

• A)Alice
• B)Bob
• C)Cecil
• D)Donna
• E)They will all come up with the same figure.

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Definitions:

Spicules

Slender skeletal spikes made of calcium carbonate or silica; found in sponges and some other animals.

Amoeboid Cells

Cells that move or feed by forming extensions of their cytoplasm called pseudopodia, typical of amoebas.

Sponges

Simple aquatic animals belonging to the phylum Porifera, characterized by their porous bodies through which water flows.

Correct Phylum

The appropriate classification category in the biological taxonomy system that groups together organisms sharing a common basic structure.