Quattro, Inc

question 113

Multiple Choice

Quattro, Inc. has the following mutually exclusive projects available. The company has historically used a 4-year cutoff for projects. The required return is 11 percent. The payback for Project A is ____ while the payback for Project B is _____. The NPV for Project A is _____ while the NPV for Project B is _____. Which project, if any, should the company accept?

• A) 3.92 years; 3.64 years; $780.85; $1,211.48; accept both Project A and B
• B) 3.92 years; 3.79 years; -$211.60; $1,211.48; accept Project B only
• C) 3.92 years; 3.79 years; $780.85; -$7,945.93; accept Project A only
• D) 4.06 years; 3.64 years; $780.85; $1,211.48; accept both Project A and B
• E) 4.06 years; 3.79 years; -$211.60; -$7,945.93; reject both projects

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Definitions:

Trabeculae

A network of supporting fibrous or muscular strands in organs, notably seen in the structure of spongy bone and certain organs like the spleen.

Spongy Bone

Spongy bone, also known as cancellous bone, is a porous type of bone found at the ends of long bones and in the inner layers of short, flat, and irregular bones, characterized by a lattice-like structure of trabeculae.

Compact Bone

Dense, hard tissue that forms the outer layer of bones, providing strength, structure, and the ability to withstand stresses.

Trabeculae

The network of supportive fibrous bundles in organs like the heart or the spongy bone structure, providing structural support.