You Are Considering Two Mutually Exclusive Projects with the Following

question 91

Multiple Choice

You are considering two mutually exclusive projects with the following cash flows.Which project(s) should you accept if the discount rate is 8.5 percent? What if the discount rate is 13 percent?

• A)accept project A as it always has the higher NPV
• B)accept project B as it always has the higher NPV
• C)accept A at 8.5 percent and B at 13 percent
• D)accept B at 8.5 percent and A at 13 percent
• E)accept B at 8.5 percent and neither at 13 percent

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Definitions:

Aggregate Demand

Aggregate demand represents the total demand for goods and services within a specified economy at a given overall price level and in a given time period.

Determinant of Employment

Factors that influence the hiring decisions of employers and the availability of jobs within an economy.

Demand Creates

The assertion that consumer demand drives the production and supply of goods and services in the market.

Supply of Savings

The total amount of income that households choose to save and not consume, available for investment purposes.