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

question 57

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:

Separating Elements

Components or techniques used in systems and processes to divide, isolate, or detach different substances or parts.

Electrically

Pertaining to or operated by electricity; involving, derived from, or related to electricity.

Ionization Potential

The minimum amount of energy required to remove the most loosely bound electron from an isolated neutral atom or molecule.

Voltage

An electrical measurement expressing the potential difference between two points, the driving force of electric current.