Two Mutually Exclusive Projects Have 3-Year Lives and a Required

question 18

Multiple Choice

Two mutually exclusive projects have 3-year lives and a required rate of return of 10.5 percent.Project A costs $75,000 and has cash flows of $18,500,$42,900,and $28,600 for Years 1 to 3,respectively.Project B costs $72,000 and has cash flows of $22,000,$38,000,and $26,500 for Years 1 to 3,respectively.Using the IRR,which project,or projects,if either,should be accepted?

• A)Accept both projects
• B)Select either project as there is no significant difference between them
• C)Accept Project A and reject Project B.
• D)Accept Project B and reject Project A.
• E)Reject both projects

---

Definitions:

Family Systems Framework

A theoretical model that views the family as an emotional unit and uses systems thinking to describe the complex interactions within the family structure.

Dimension

An aspect or feature of a situation, problem, or thing; sometimes refers to measurable extents such as length, breadth, and depth.

Assessment

The process of evaluating or analyzing something to understand its value, significance, or condition.

Fault-Defend Pattern

A communication pattern where one party consistently blames the other, leading to defense mechanisms rather than constructive problem-solving.