Project X Has an Initial Cost of $20,000 and a Cash

question 20

Multiple Choice

Project X has an initial cost of $20,000 and a cash inflow of $25,000 in Year 3.Project Y costs $40,700 and has cash flows of $12,000,$25,000,and $10,000 in Years 1 to 3,respectively.The discount rate is 6 percent and the projects are mutually exclusive.Based on the individual project's IRRs you should accept Project ________; based on NPV you should accept Project ________; the final decision should be to accept Project ________.

• A)Y; Y; Y
• B)Y; X; X
• C)X; Y; Y
• D)X; X; X
• E)Y; X: Y

---

Definitions:

Frequency Polygon

A graphical representation of the distribution of a data set, using a line graph to connect midpoints of intervals.

Bar Chart

A graphical representation of data using bars of different heights or lengths to show the values of various categories.

Frequency Distribution

A summary of how often each value in a set of data occurs, typically presented in a table or graphically as a histogram.

SAT Math Scores

Quantitative data reflecting individuals’ performance on the mathematics section of the SAT examination.