A Firm Is Considering a Project with the Following Cash

question 44

Multiple Choice

A firm is considering a project with the following cash flows: Time 0 = +$20,000,Years 1-5 = −$4,500.Should the project be accepted if the cost of capital is 10%?

• A) Yes; The IRR of the project is 4.06%.
• B) Yes; The IRR of the project is 12.5%.
• C) No; The IRR of the project is 4.06%.
• D) No; The IRR of the project is 12.5%.

---

Definitions:

Pure Strategies

A strategy in game theory in which a player makes a specific choice or takes a specific action with certainty.

Sponsor

An individual or organization that provides funds for a project or activity carried out by another, in exchange for advertising or promotion.

Nash Equilibrium

A concept in game theory where no player can benefit by changing their strategy while the other players keep theirs unchanged, representing a state of optimal strategy among all participants.

Mixed Strategies

In game theory, strategies involving randomizing choices to make opponents indifferent between their own possible actions.