Woodson Inc

question 12

Multiple Choice

Woodson Inc.has two possible projects, Project A and Project B, with the following cash flows: At what required rate of return do the two projects have the same net present value (NPV) ? (In other words, what is the "crossover rate" of the projects' NPV profiles?)

• A) 10.3%
• B) 13.5%
• C) 15.8%
• D) 21.7%
• E) 34.8%

---

Definitions:

Adjusting Entries

Journal entries made in an accounting period to accommodate incomes and expenditures in their appropriate financial period.

Inventory Returns

Items sent back to the manufacturer or supplier from the buyer due to defects, excess orders, or other reasons.

Perpetual Inventory System

An immediate inventory recording method in accounting that leverages computerized point-of-sale and enterprise asset management software to track purchases or sales.

Quick Ratio

A liquidity ratio that measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.