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:

Short-Term Memory

A cognitive storage system that temporarily holds a limited amount of information for a brief period, typically around 20 seconds.

Working Memory Capacity

The amount of information that can be held in working memory at one time, critical for reasoning and the guidance of decision-making and behavior.

Episodic Memory

A type of long-term memory that involves the recollection of specific events, situations, and experiences, including contextual details of time and place.

Flashbulb Memory

Highly detailed and vivid memories of significant or shocking events, which are remembered with great accuracy as though they were captured by a camera.