Projects a and B Are Mutually Exclusive Lending Projects

question 70

Multiple Choice

Projects A and B are mutually exclusive lending projects. Project A has an IRR of 20% while Project B has an IRR of 30%. You would be most apt to select Project A if:

• A) Project B has a longer life than Project A.
• B) Project A has more risk than Project B.
• C) Project A is twice the size of Project B.
• D) Project B has a larger cash inflow in Year 1 than Project A.

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Definitions:

Mean

The average for a set of scores.

Mode

The value that occurs most frequently in a dataset, representing the "most common" finding or outcome.

Range Values

The difference between the highest and the lowest values in a set of data points, showing the spread or dispersion of the data.

Median

The middle value in a data set when it's arranged in ascending or descending order.