The Projected Cash Flows for Two Mutually Exclusive Projects Are

question 70

Multiple Choice

The projected cash flows for two mutually exclusive projects are as follows: If the cost of capital is 10%, the decidedly more favorable project is:

• A)project B with an NPV of $39,539 and an IRR of 19.9%.
• B)project A with an NPV of $5,230 and an IRR of 10.8%.
• C)project A with an NPV of $39,539 and an IRR of 10.8%.
• D)project B with an NPV of $5,230 and an IRR of 19.9%.

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Definitions:

Df

Short for degrees of freedom, referring to the number of independent pieces of information remaining after estimating one or more parameters.

Y-Intercept

The point where a line crosses the y-axis on a graph, indicating the value of y when x equals zero.

Regression Equation

A mathematical formula used to predict the value of a dependent variable based on one or more independent variables.

Drivers' Average Speed

The mean velocity calculated from the speeds of multiple drivers over a specified distance or time period.