A Project Has a Series of Non-Normal Cash Flows That

question 24

Multiple Choice

A project has a series of non-normal cash flows that result in a terminal value (TV) of $120,000 in 5 years.If the project's initial costs are $33,000,what is your recommendation to management regarding this project (accept/reject) ?

• A)accept as the MIRR is 29.50
• B)reject as the MIRR is greater than zero
• C)accept as the terminal value is greater than the present value of the costs
• D)accept as the MIRR is 38.95%

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Definitions:

Synergy

A positive force that occurs in groups when group members are stimulated to produce new solutions to problems through the process of mutual influence and encouragement within the group.

Cognitive Consonance

An error in key-term, possibly meant "Cognitive Dissonance." NO.

Creativity

The ability to produce original, innovative ideas, solutions, or products through imaginative thinking and problem-solving.

Intuition

The ability to understand or know something immediately, based on feelings rather than facts or evidence.