You Are Considering a Project with the Following Data: Internal

question 84

Multiple Choice

You are considering a project with the following data: Internal rate of return: 8.7%
Profitability ratio: 0.98
Net present value: -£393
Payback period: 2.44 years
Required return: 9.5%
Which one of the following is correct given this information?

• A)The discount rate used in computing the net present value must have been less than 8.7%.
• B)The discounted payback period will have to be less than 2.44 years.
• C)The discount rate used to compute the profitability ratio was equal to the internal rate of return.
• D)This project should be accepted based on the profitability ratio.
• E)This project should be rejected based on the internal rate of return.

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Definitions:

Agent to Agent

Communication or interaction between autonomous entities in a network, typically in the context of software or business negotiations.

Principal to Staff

The relationship and authority dynamic between the primary leaders or executives (principals) and the employees (staff) within an organization.

External Driver

Factors outside an organization that influence its operations, strategies, and success, such as market trends, regulatory changes, or economic conditions.

3C Model

A business model that focuses on three key factors: Company, Customer, and Competitor, to guide strategic development and decision-making.