Findell Corporation Is Considering Two Projects,A and B,and It Has

question 2

Multiple Choice

Findell Corporation is considering two projects,A and B,and it has gathered the following estimates for the project $\begin{array}{|l|l|l|}\hline & \text { Project A } & \text { Project B } \\\hline \text { Useful life } & 5 \text { years } & 5 \text { years } \\\hline \text { Present value of cash inflows } & \$ 84,360 & \$ 55,100 \\\hline \text { Present value of cash outflows } & \$ 77,000 & \$ 49,000 \\\hline & & \\\hline\end{array}$ What is the present value index for project A?

• A) 1.096
• B) 1.124
• C) 0.889
• D) 0.913

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Definitions:

Marginal Revenue

The additional revenue that a firm receives from selling one extra unit of a product or service.

Demand Schedule

A Demand Schedule is a tabular representation of the relationship between the price of a good or service and the quantity demanded by consumers, underlining the law of demand.

Patents

Legal documents granting an inventor exclusive rights to produce, use, and sell an invention for a certain number of years.

Research And Development

A business or government activity that involves the study and creation of new products, services, or discoveries.