You Are Considering the Following Two Mutually Exclusive Projects A)Project A; Because It Pays Back Faster
B)Project A; Because

question 46

Multiple Choice

You are considering the following two mutually exclusive projects.The required return on each project is 14 percent.Which project should you accept and what is the best reason for that decision? $$\begin{array} { | c | r | r | } \hline \underline { \text { Year } } & \underline { \text { Project A } } & \text { Project B } \\\hline 0 & - \$ 24,000 & - \$ 21,000 \\\hline 1 & 9,500 & 6,500 \\\hline 2 & 16,200 & 9,800 \\\hline 3 & 8,700 & 15,200 \\\hline\end{array}$$

• A)Project A; because it pays back faster
• B)Project A; because it has the higher profitability index
• C)Project B; because it has the higher profitability index
• D)Project B; because it has the higher net present value
• E)Project A; because it has the higher net present value

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Definitions:

Delay of Gratification

The ability to resist an immediate reward in preference for a later, often greater, reward, reflecting self-control and forward planning.

Academic and Social Competence

The ability to achieve in academic environments and to successfully interact socially with others.

General Coping Ability

The overall capability of an individual to manage stress, adversity, or change effectively.

Self-Reliance

The reliance on one's own capabilities, judgment, or resources rather than those of others.