You Are Analyzing a Project and Have Prepared the Following

question 96

Multiple Choice

You are analyzing a project and have prepared the following data: $$\begin{array} { | l | l | } \hline \text { Year } & \text { Cad Flow } \\\hline 0 & -£ 169,000 \\\hline 1 & £ 46,200 \\\hline 2 & £ 87,300 \\\hline 3 & £41,000 \\\hline 4 & £ 39,000 \\\hline\end{array}$$ Required payback period: 2.5 years
Required AAR: 7.25%
Required return: 8.50%
Based on the payback period of _____for this project,you should _____ the project.

• A)1.87 years; accept
• B)2.87 years; accept
• C)2.87 years; reject
• D)3.13 years; reject
• E)3.87 years; reject

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Definitions:

Psychosexual Development

A Freudian theory that describes how personality develops during childhood through a series of stages focused on erogenous zones.

Fixation

An obsessive focus or attachment to a particular stage of development, object, or activity, often resulting in stagnation in psychological growth.

Unconscious

Part of the mind that is inaccessible to the conscious mind but that affects behaviors and emotions.

Hypnosis

A state of heightened focus and concentrative relaxation, induced by suggestion, that can alter perception, sensation, and can be used for therapeutic purposes.