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

question 108

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 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Use the NPV decision to evaluate this project; should it be accepted or rejected?

• A) NPV = $1,766.55; accept the project
• B) NPV = $892.19; accept the project
• C) NPV = $1,288.94; accept the project
• D) NPV = -$104.73; reject the project

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Definitions:

Multiple Births

The delivery of more than one baby from the same pregnancy, such as twins or triplets.

Canalized Traits

Genetic characteristics that are not easily changed by environmental factors due to their strong genetic control.

Genetic Relationship

The connection between organisms based on the similarity of their DNA sequences.

Nonshared Environmental

Influences that result in differences among siblings, including experiences outside the family that are not shared by other siblings.