You Are Considering Two Independent Projects with the Following Cash

question 57

Multiple Choice

You are considering two independent projects with the following cash flows.The required return for both projects is 16 percent.Given this information,which one of the following statements is correct?

• A)You should accept Project A and reject Project B based on their respective NPVs.
• B)You should accept Project B and reject Project A based on their respective NPVs.
• C)You should accept Project A and reject Project B based on their respective IRRs.
• D)You should accept Project B and reject Project A based on their respective IRRs.
• E)You should accept both projects based on both the NPV and IRR decision rules.

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Definitions:

Train

A series of connected vehicles traveling on railways, used for transporting people or cargo.

Biscuit

A small baked product that varies in texture and taste based on geography, ranging from hard and flat to soft and flaky.

Positive Punishment

The presentation of a stimulus following a given behavior in order to decrease the frequency of that behavior.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior. Through operant conditioning, an individual makes an association between a particular behavior and a consequence (either a reward or punishment).