Which Mutually Exclusive Project Would You Select,if Both Are Priced

question 34

Multiple Choice

Which mutually exclusive project would you select,if both are priced at $1,000 and your discount rate is 15 percent; Project A with three annual cash flows of $1,000,or Project B,with three years of zero cash flow followed by three years of $1,500 annually?

• A) Project A
• B) Project B
• C) you are indifferent since the NPVs are equal
• D) Neither project should be selected

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Definitions:

Taxi Cabs

Licensed vehicles for hire that provide passenger transport services for a fare, traditionally hailed on the street or booked in advance.

Cab Fares

Charges levied for the service of transporting individuals in taxicabs, typically based on distance traveled and time taken.

Operating Cost

Expenses associated with the day-to-day functioning of a business, such as rent, utilities, and salaries.

Subway Fares

The charges or fees paid by passengers for using the subway system for transportation.