Table 10.3 A Firm Is Evaluating Two Projects That Are Mutually Exclusive

question 37

Multiple Choice

Table 10.3
A firm is evaluating two projects that are mutually exclusive with initial investments and cash flows as follows:
-If the firm in Table 10.3 has a required payback of two years, it should ________.

• A) accept Project A and Project B
• B) accept Project A and reject Project B
• C) reject Project A and accept Project B
• D) reject both the projects

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Definitions:

Vertical Intercept

The point where a line or curve meets the vertical axis (usually the y-axis) on a graph.

Independent Variable

A variable that is manipulated or controlled in an experiment to test its effect on a dependent variable.

Dependent Variable

In an experiment or study, the variable that is being tested and measured, which changes in response to the independent variable.

Upsloping Line

A line on a graph that shows an increase in the value of a variable on the vertical axis as the value of a variable on the horizontal axis increases, typically seen in supply curves.