Quattro,Inc The Payback for Project a Is ____ While the Payback

question 27

Multiple Choice

Quattro,Inc.has the following mutually exclusive projects available.The company has historically used a four-year cutoff for projects.The required return is 11 percent. $$\begin{array} { | r | r | r | } \hline \underline { \text { Year } } & \underline { \text { Cash Flow } } & \underline { \text { Cash } } \\ & \underline { ( A ) } & \underline { \text { Flow } ( \mathrm { B } ) } \\\hline 0 & - \$ 75,000 & - \$ 85,000 \\\hline 1 & 6,200 & 27,700 \\\hline 2 & 9,400 & 26,500 \\\hline 3 & 28,100 & 24,200 \\\hline 4 & 32,600 & 15,600 \\\hline\end{array}$$ The payback for Project A is ____ while the payback for Project B is ____.The NPV for Project A is _____ while the NPV for Project B is ____.Which project,if any,should the company accept?

• A)3.92 years; 3.64 years; $780.85; $1,211.48; accept both Projects
• B)3.92 years; 3.79 years; -$17,108.60; $1,211.48; accept Project B only
• C)3.96 years; 3.42 years; -$19,764.06; -$10,566.02; reject both projects
• D)3.96 years; 3.42 years; $17,780.85; -$1,211.48; accept Project A only
• E)4.06 years; 3.79 years; $211.60; -$7,945.93; accept Project A only

Recognize the classification and treatment of asset, liability, and equity accounts in financial statements.

Appreciate the role and mechanics of adjusting and closing entries in the accounting cycle.

Identify the characteristics and classification of assets, liabilities, and equity on the balance sheet.

Comprehend the revenue recognition principle and its application in different scenarios.

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Definitions:

Produce

Refers to agricultural products and goods that have been grown or farmed.

Industry

The sector of an economy that is involved in the production of goods or related services.

Advantage

A condition or circumstance that places a person or entity in a favorable or superior position.

Import Quotas

Restrictions imposed by a government on the amount or value of goods that can be imported into a country, often used to protect domestic industries.