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

question 25

Multiple Choice

A project has a series of non-normal cash flows that result in a terminal value (TV) of $121,900 in 6 years.If the project's initial costs are $50,000,what is your recommendation regarding this project to management (accept/reject) ?

• A)accept as the MIRR is 12%
• 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 16.00%

---

Definitions:

Financing Policies

Guidelines a company follows to manage its financing decisions, including how it chooses between debt and equity financing.

FVTPL

Fair Value Through Profit or Loss, a financial reporting method where assets and liabilities are periodically revalued, with the changes affecting the income statement directly.

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of a business.

Significant Influence

The ability to engage in the financial and operational policy choices of an invested entity without having control over them.