You Are Analyzing the Following Two Mutually Exclusive Projects and Have

question 41

Multiple Choice

You are analyzing the following two mutually exclusive projects and have developed the following information.What is the incremental IRR?
$$\begin{array} { | l | l | l | } \hline \text { Year } & \text { Project A } & \text { Project } \mathrm { B } \\\hline \mathrm { 0 } & - £ 84,500 & - £ 7 6,900 \\\hline 1 & £ 29,000 & £ 25,000 \\\hline 2 & £ 40,000 & £ 35,000 \\\hline 3 & £ 27,000 & £ 26,000 \\\hline\end{array}$$

• A)11.11%
• B)13.01%
• C)14.91%
• D)16.75%
• E)17.90%

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Definitions:

Null Hypothesis

A default hypothesis that there is no significant difference or effect, intended to be contested by an alternative hypothesis.

Expected Frequency

The predicted number of times an outcome is expected to occur in a statistical experiment, based on theoretical probability distribution.

Significance Level

The threshold used in statistical testing to determine if a result is statistically significant, commonly set at 0.05, indicating a 5% risk of concluding an effect exists when it does not.

Z-Test

A statistical test used to determine whether two population means are different when the variances are known and the sample size is large.