You Are Considering a Project with Conventional Cash Flows and the Following

question 31

Multiple Choice

You are considering a project with conventional cash flows and the following characteristics: Which of the following statements is correct given this information?
I.The discount rate used in computing the net present value was less than 11.63 percent.
II.The discounted payback period must be more than 2.98 years.
III.The discount rate used in the computation of the profitability ratio was 11.63 percent.
IV.This project should be accepted as the internal rate of return exceeds the required return.

• A)I and II only
• B)III and IV only
• C)I, II, and IV only
• D)II, III, and IV only
• E)I, II, III, and IV

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Definitions:

Nicotine Replacement Therapy

A medical treatment for helping people quit smoking, using products that supply nicotine in controlled amounts without the tar, carbon monoxide, and other harmful substances in tobacco.

Nicotine Dependence

A physical and psychological condition characterized by an addiction to the nicotine found in tobacco products.

Antabuse

A prescription medication used as a treatment for alcohol addiction, causing unpleasant effects when alcohol is consumed.

Vomiting

The forceful expulsion of stomach contents through the mouth caused by various conditions, ranging from gastrointestinal infections to motion sickness.