Project a Has an IRR of 20% While Project B

question 56

Multiple Choice

Project A has an IRR of 20% while Project B has an IRR of 30%.Under which of the following situations might you be inclined to select Project A,assuming the projects to be mutually exclusive,lending projects?

• A) Project A is riskier.
• B) Project A requires a smaller initial investment.
• C) Project A requires a larger initial investment.
• D)Project A requires cash outflows in the final period.

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Definitions:

Missouri Compromise

An agreement passed in 1820 that allowed Missouri to enter the Union as a slave state and Maine as a free state, while banning slavery in the remainder of the Louisiana Territory north of the 36° 30′ latitude.

Free State

Denotes a state in which slavery was not legally permitted, especially in the context of pre-Civil War United States.

Union Admission

The process by which a new state is admitted to the United States, involving Congress and the fulfillment of certain constitutional and legal prerequisites.

Disenfranchisement

The revocation or denial of voting rights, often used historically to exclude specific groups from political participation based on race, gender, or socio-economic status.