Compute the PI Statistic for Project X and Note Whether $$\begin{array} { l l l l l l l } \text { Time: } & 0 & 1 & 2 & 3 & 4 & 5 \\\text { Cash flow: } & - 250 & 75 & 0 & 100 & 75 & 50\end{array}$$

question 19

Multiple Choice

Compute the PI statistic for Project X and note whether the firm should accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 10 percent. $$\begin{array} { l l l l l l l } \text { Time: } & 0 & 1 & 2 & 3 & 4 & 5 \\\text { Cash flow: } & - 250 & 75 & 0 & 100 & 75 & 50\end{array}$$

• A)-0.0977 percent, reject
• B)-9.77 percent, reject
• C)-24.41 percent, reject
• D)24.41 percent, accept

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Definitions:

National Debt

Money owed by the government to individuals, businesses, and government agencies who purchase Treasury bills, Treasury notes, and Treasury bonds sold to cover expenditures.

Corporate Taxes

Taxes imposed on the income or profit of corporations and other business entities by the government.

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing at their face value.

Hyperinflation

Economic situation characterized by soaring prices.