Which Mutually Exclusive Project Would You Select, If Both Are

question 76

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:

Reactivity

The tendency of a substance to undergo chemical reaction, either by itself or with other materials.

Substrates

The substances on which an enzyme acts during a biochemical reaction.

PhBr

Bromobenzene, an aromatic compound where a bromine atom is bonded to a benzene ring.

Major Organic Product

The primary product of an organic reaction that is formed in the greatest amount compared to other products.