Suppose Your Firm Is Considering Investing in a Project with the Cash

question 68

Multiple Choice

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Use the discounted payback decision to evaluate this project; should it be accepted or rejected?

• A) Discounted payback = 4.29 years; accept the project
• B) Discounted payback = 3.97 years; accept the project
• C) Discounted payback > 4.5 years; reject the project
• D) Discounted payback = 4.4 years; accept the project

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Definitions:

Technological Attributes

Characteristics or features of technology, including hardware and software, that define their capabilities, functionalities, and performance.

Project Complexity

A measure of the various intricate factors and elements within a project, including its structure, governance, and uncertainty levels, that can affect its execution and outcome.

Technological Sophistication

The level of advanced technological features, innovation, and capabilities within an organization or system.

Technological Compatibility

The extent to which a technology fits and functions well within a particular system or environment without conflict.