Isaac Has Analyzed Two Mutually Exclusive Projects of Similar Size

question 109

Multiple Choice

Isaac has analyzed two mutually exclusive projects of similar size and has compiled the following information based on his analysis.Both projects have 3- year lives. Isaac has been asked for his best recommendation given this information.His recommendation should be to accept:

• A)both projects.
• B)project B because it has the shortest payback period.
• C)project B and reject project A based on their net present values.
• D)project A and reject project B based on their average accounting returns.
• E)neither project.

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Definitions:

Less Intelligent

A term, often considered pejorative, used to describe lower-than-average cognitive abilities or intellectual functioning.

Transference

A phenomenon in psychoanalysis in which a patient redirects feelings and desires, often unconsciously, from a person in their past to a new object, usually the therapist.

Gain-Loss Theory

A psychological concept suggesting that a person's attraction to others increases with signs of increasing interest from them, and decreases with signs of disinterest or hostility.

Halo Effect

A cognitive bias in which an observer's overall impression of a person, product, or company influences their feelings and thoughts about that entity's character or properties.