Blue Water Systems Is Analyzing a Project with the Following

question 111

Multiple Choice

Blue Water Systems is analyzing a project with the following cash flows.Should this project be accepted based on the discounting approach to the modified internal rate of return if the discount rate is 14 percent? Why or why not? $$\begin{array} { c c } \frac { \text { Year } } { 0 } & \frac { \text { Cash Flow } } { - \$ 236,000 } \\1 & 137,400 \\2 & 189,300 \\3 & - 25,000\end{array}$$

• A)Yes; The MIRR is 13.48 percent.
• B)Yes; The MIRR is 17.85 percent.
• C)Yes; The MIRR is 21.23 percent.
• D)No; The MIRR is 5.73 percent.
• E)No; The MIRR is 17.85 percent.

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Definitions:

Security

The condition of being protected from or not exposed to danger or risk; also refers to measures taken for safety.

Motivation Factors

Elements that influence an individual's level of motivation, including intrinsic rewards, recognition, and personal goals.

Herzberg's Two-Factor Theory

A motivational theory that divides factors in the workplace into two categories: hygiene factors, which if inadequate cause dissatisfaction, and motivators, which can lead to satisfaction.

Expectancy Theory

A motivational theory suggesting that people are motivated to perform behaviors if they believe that such behaviors will lead to desired outcomes.