Which of the Following Statements Is Most Likely Correct for a Project

question 105

Multiple Choice

Which of the following statements is most likely correct for a project costing $50,000 and returning $14,000 per year for five years?

• A)NPV = $3,071.01
• B)NPV = $20,000
• C)IRR = 2.8 percent
• D)IRR is greater than 10 percent

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Definitions:

Permanent/Temporary

Classification of accounts where permanent accounts are balance sheet items carrying over to the next financial period, while temporary accounts are income statement items closed at the end of the period.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, reflecting its nature in accounting equations.

Financial Statement

Documentation that shows an entity's financial status at a specific time, including balance sheets, income statements, and cash flow statements.

Permanent/Temporary

Categories of accounting items: permanent (or real) accounts carry their ending balances into the next accounting period, and temporary (or nominal) accounts are closed at the end of every period.