Evaluate the Following Project Using an IRR Criterion,based on an Opportunity

question 94

Multiple Choice

Evaluate the following project using an IRR criterion,based on an opportunity cost of 10 percent: CF₀ = -6,000,CF₁ = +3,300,CF₂ = +3,300.

• A) accept, since IRR exceeds opportunity cost.
• B) reject, since opportunity cost exceeds IRR.
• C) accept, since opportunity cost exceeds IRR.
• D) reject, since IRR exceeds opportunity cost.

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Definitions:

Crocus Cloth

A fine-grained abrasive cloth used for polishing metal surfaces to a smooth finish, often employed in metalworking and finishing tasks.

Bolt Holes

Pre-drilled openings in a surface or object designed to accommodate bolts for assembly and securing parts together.

Flanges and Manifolds

Components used in piping systems; flanges connect pipes, valves, pumps, while manifolds distribute or collect fluids from multiple sources.