Use the Information for the Question(s) Below

question 2

Multiple Choice

Use the information for the question(s) below.
Boulderado has come up with a new composite snowboard. Development will take Boulderado four years and cost $250,000 per year, with the first of the four equal investments payable today upon acceptance of the project. Once in production the snowboard is expected to produce annual cash flows of $200,000 each year for 10 years. Boulderado's discount rate is 10%.
-Take any investment opportunity where the IRR ________ the opportunity cost of capital.Turn down any opportunity whose IRR is ________ than the opportunity cost of capital.

• A) exceeds; less
• B) exceeds; higher
• C) less than; less
• D) less than; higher

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Definitions:

Endemic Species

A species found only in the region where it evolved.

Habitat Destruction

The process by which a natural habitat becomes incapable of supporting its native species, leading to a loss of biodiversity.

Plastic Trash

Waste material consisting of discarded items made of plastic, often found polluting environments such as oceans, rivers, and landscapes.

Durable Items

Goods or products designed to last for a long period without frequent replacement, typically including appliances, cars, and furniture.