A Project Has an Initial Cash Inflow of $40,800 and a Cash

question 4

Multiple Choice

A project has an initial cash inflow of $40,800 and a cash outflow of $44,900 in Year 1.The discount rate is 10 percent.Should this project be accepted or rejected based on IRR? Why?

• A)Accepted,because the IRR is less than the discount rate.
• B)Rejected,because the IRR is less than the discount rate.
• C)Accepted,because the IRR is greater than the discount rate.
• D)Rejected,because the IRR is greater than the discount rate.
• E)Accepted,because the IRR equals the discount rate.

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Definitions:

Efficiency

The extent to which resources are used in the best possible way to produce goods and services.

Labor Turnover

The rate at which employees leave a company and are replaced by new employees, often used as a measure of a company's stability and employee satisfaction.

Voice Mechanisms

Methods or processes through which opinions, feedback, or preferences are expressed and communicated in a decision-making context.

Exit Mechanisms

Strategies or methods used by investors, entrepreneurs, or organizations to withdraw their stake from an investment or business venture.