Suppose Your Firm Is Considering Two Mutually Exclusive, Required Projects

question 90

Multiple Choice

Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their risk class is 8 percent, and the maximum allowable payback and discounted payback statistic for the projects are two and three years, respectively. $$\begin{array} { l l l l l } \text { Time } & 0 & 1 & 2 & 3 \\\text { Project A Cash Flow } & - 20,000 & 10,000 & 30,000 & 1,000 \\\text { Project B Cash Flow } & - 30,000 & 10,000 & 20,000 & 50,000\end{array}$$ Use the PI decision rule to evaluate these projects; which one(s) should be accepted or rejected?

• A)Accept both A and B
• B)Accept neither A nor B
• C)Accept A, reject B
• D)Reject A, accept B

Comprehend the concept of utility maximization by households.

Analyze the effects of economic trends and labor market changes on household decisions.

Grasp the rationale behind household decisions in supplying labor and resources.

Describe the implications of increased real wages on household behavior and opportunity costs.

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Definitions:

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Characterized by a complaining or grumbling tone or behavior, often perceived as irritating.

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Delivery of services in a manner that achieves desired outcomes efficiently and satisfactorily.

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The process of forming opinions or conclusions about people or situations, often involving assessment against certain criteria or standards.

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Criticizing involves expressing disapproval or pointing out the faults or mistakes of someone or something, often in a negative manner.