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:

Qualifying Children

Qualifying Children are the dependents of a taxpayer who meet specific IRS criteria for the taxpayer to be eligible for certain tax credits and deductions.

EIC

Earned Income Credit, a refundable tax credit for low- to moderate-income workers, especially those with children.

EIC

Earned Income Credit, a refundable tax credit for low- to moderate-income working individuals and families.

Tax Refund

The amount of money returned to a taxpayer when the amount of taxes paid exceeds the actual tax liability.