You Are Considering Two Independent Projects Both of Which Have

question 10

Multiple Choice

You are considering two independent projects both of which have been assigned a discount rate of 12 percent.Project A costs $39,100 and produces cash flows of $15,900 a year for 3 years.Project B costs $22,900 and produces cash flows of $14,000 a year for 2 years.Based on the profitability index,what is your recommendation concerning these projects?

• A)Accept both projects
• B)Accept Project B because it has the lower PI
• C)Accept Project A because it has the lower PI
• D)Accept Project A and reject Project B
• E)Reject Project A and accept Project B

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Definitions:

Third-Degree Burn

A severe burn characterized by the destruction of both the outer and underlying layers of skin, potentially affecting deeper tissues and causing significant scarring.

Spiral

Having a circular fashion.

Fracture

The breaking of a bone, cartilage, or the like, often resulting from a sudden injury or stress.

Long Bone

A type of bone that is longer than it is wide, primarily found in the arms and legs.