A Financial Manager Is Evaluating a Project Which Is Expected

question 126

Multiple Choice

A financial manager is evaluating a project which is expected to generate profits of $100,000 per year for the next 10 years.The project should be accepted if

• A) the cost of the project is less than $1,000,000.
• B) the cost of the project is less than the present value of $100,000 per year for 10 years.
• C) this project's expected profits are higher than any other projects the corporation has available.
• D) the present value of the project's cash inflows exceeds the present value of the project's cash outflows.

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Definitions:

Frustration-Regression Principle

A concept suggesting that when a higher-level need is frustrated, individuals may regress to lower-level needs that are easier to satisfy.

Reactivated Need

A previously satisfied need that becomes active again due to changes in circumstances or environment.

Esteem Needs

Esteem needs are a human's desire for respect, self-esteem, and recognition from others, as posited in Maslow's hierarchy of needs.

Promotion

The act of raising someone to a higher position or rank, often accompanied by increased responsibilities and benefits.