A Project Has an Initial Cash Inflow of $87,700 and Cash

question 13

Multiple Choice

A project has an initial cash inflow of $87,700 and cash flows of -$48,700 in Year 1 and -$57,200 in Year 2.The discount rate is 14 percent.Should this project be accepted or rejected based on IRR? Why?

• A)Accepted,because this is a financing project and the IRR is less than the discount rate.
• B)Rejected,because this is an investing project and the IRR is less than the discount rate.
• C)Accepted,because this is a financing project and the IRR is greater than the discount rate.
• D)Rejected,because this is an investing project and the IRR is greater than the discount rate.
• E)Accepted,because the IRR equals the discount rate.

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Definitions:

Anxiety-Arousing Memories

Recollections of past events that trigger feelings of fear, worry, or apprehension.

Repression

In psychoanalytic theory, the basic defense mechanism that banishes from consciousness anxiety-arousing thoughts, feelings, and memories.

Long-Term Memory

The aspect of memory where information is stored for an extended period, ranging from hours to a lifetime.

Retrieval Failure

Occurs when memories are not accessible from long-term storage, often due to a lack of cues or interference from other information.