Jefferson International Is Trying to Choose Between the Following Two

question 8

Multiple Choice

Jefferson International is trying to choose between the following two mutually exclusive design projects: $$\begin{array} { | r | r | r | } \hline \text { Year } & \text { Cash Flow } & \underline { \text { Cash } } \\&{ ( \mathrm { A } ) } & \underline { \text { Flow } ( \mathrm { B } ) } \\\hline 0 & - \$ 55,000 & - \$ 29,000 \\\hline 1 & 12,300 & 19,400 \\\hline 2 & 15,100 & 16,600 \\\hline 3 & 50,000 & 900 \\\hline\end{array}$$ The required return is 13 percent.If the company applies the profitability index (PI) decision rule,which project should the firm accept? If the company applies the NPV decision rule,which project should it take?
Given your first two answers,which project should the firm actually accept?

• A)Project A; Project B; Project A
• B)Project A; Project B; Project B
• C)Project B; Project A; Project A
• D)Project B; Project A; Project B
• E)Project B; Project B, Project B

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Definitions:

Achievement

The accomplishment of a goal or attainment of a higher level of performance, often recognized and measurable.

Affiliation

The need to form connections with others or be part of a group, often considered a fundamental human motivation.

Appraisal

The process of evaluating the significance of a person, place, thing, or situation and determining its relevance to one's well-being.

Amae

A Japanese concept referring to an individual's ability to depend on another's benevolence, often seen as a desirable trait in relationships within Japanese culture.