A Future News Release Might Report That a New Planet

question 66

Multiple Choice

A future news release might report that a new planet has been found around a star very similar to our sun. This newly discovered planet is claimed to have a mass 40 times that of Earth and is located nearly 25 AU from the star it orbits. Which of the following would be a reasonable prediction about this planet?

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

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Definitions:

Independent Projects

Investment projects that do not affect each other’s outcomes or acceptability. Evaluating one does not impact the consideration of another.

Mutually Exclusive

Situations or decisions that cannot occur simultaneously; selecting one option precludes the choice of the other.

Net Present Value

The difference between the current value of cash inflows and the current value of cash outflows over a period of time; used to evaluate the profitability of an investment.

Internal Rate of Return

The interest rate that brings the net present value of all incoming and outgoing cash flows from an investment or project to a neutral point of zero.