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%.

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Definitions:

Neutral Buffer

Neutral Buffer denotes a non-committal or impartial statement or element that mitigates or softens the impact of the surrounding content.

Positive Wording

The practice of choosing words that have positive connotations to create an encouraging or optimistic tone.

Direct Opening

A communication approach that starts with the main message or purpose at the very beginning, often used for clarity and efficiency.

Neutral Buffer

A statement or phrase used at the beginning of a communication to ease into the subject without showing a strong emotion or bias.