Suppose Your Firm Is Considering Investing in a Project with the Cash

question 51

Multiple Choice

Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistic for the project are two and two and a half years, respectively. $$\begin{array} { | l | c | c | c | c | c | c | } \hline \text { Time } & 0 & 1 & 2 & 3 & 4 & 5 \\\hline \text { Cash Flow } & - 125,000 & 65,000 & 78,000 & 105,000 & 105,000 & 25,000 \\\hline\end{array}$$

• A)$9,704.31, reject
• B)$84,140.71, accept
• C)$134,704.31, accept
• D)$150,868.83, accept

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Definitions:

Nutrients

Substances that provide nourishment essential for the growth and maintenance of life.

White Nose Syndrome

A fungal disease affecting hibernating bats, characterized by a white fungus on the nose and other body parts, leading to high mortality rates.

Pseudogymnoascus Destructans

A fungal pathogen known for causing White-nose syndrome, a deadly disease affecting hibernating bats.

Penicilium Chrysogenum

A species of fungus used in the production of the antibiotic penicillin.