Use the Information for the Question(s)below

question 5

Multiple Choice

Use the information for the question(s) below.

-If WiseGuy Inc is choosing one of the above mutually exclusive projects (Project A or Project B) ,given a discount rate of 8%,which should the company choose?

• A)Project A
• B)Project B
• C)Neither project - both have negative NPV.
• D)Both projects - both have positive NPV.

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Definitions:

Income Summary

The Income Summary is an account in the ledger that aggregates all revenues and expenses for a period, transferring the net result to owner's equity.

Permanent Accounts

Accounts that carry their ending balances over to the next accounting period. Examples include assets, liabilities, and equity accounts.

Post-closing Trial Balance

A listing of all active general ledger accounts with their balances after closing entries are made, serving as a check to ensure debits equal credits before beginning a new accounting period.

Income Statement

A report that outlines a company's financial results for a certain period, including income and expenditures, to reveal a net gain or deficit.