Suppose That a Project Has a Cash Flow Pattern (-$2,000

question 17

Multiple Choice

Suppose that a project has a cash flow pattern (-$2,000, $25,000, -$25000) and discount rate of 10%, its modified IRR is given by:

• A) 12.65%
• B) 25.22% or 400%
• C) 25.22% or 250%
• D) 13.64%

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Definitions:

Hasty Generalization

Drawing a broad conclusion from a small sample or isolated instances.

Accident Fallacy

Refers to a logical fallacy that involves applying a general rule to a specific case it does not apply to, often leading to erroneous conclusions.

Slippery Slope Argument

A logical fallacy that assumes a relatively small first step will lead to a chain of related events culminating in some significant effect, often negative.

Consequences

The results or outcomes that naturally follow from a person's actions or a set of circumstances.