You Would Like to Invest in the Following Project

question 101

Multiple Choice

You would like to invest in the following project. Camille,your boss,insists that only projects that can return at least $1.10 in today's dollars for every $1 invested can be accepted. She also insists on applying a 10% discount rate to all cash flows. Based on these criteria,you should:

• A) accept the project because it returns almost $1.22 for every $1 invested.
• B) accept the project because it has a positive PI.
• C) accept the project because the NPV is $2,851.
• D) reject the project because the PI is 1.05.
• E) reject the project because the IRR exceeds 10%.

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Definitions:

DMAIC

An acronym for Define, Measure, Analyze, Improve, and Control; a data-driven quality strategy used for improving, optimizing, and stabilizing business processes and designs.

Benchmarks

Standard points of reference by which something can be measured or judged, often used for comparison to assess performance or quality.