Suppose Your Firm Is Considering Investing in a Project with the Cash

question 94

Multiple Choice

Suppose your firm is considering investing in a project with the cash flows shown as follows,that the required rate of return on projects of this risk class is 10 percent,and that the maximum allowable payback and discounted payback statistics for the project are three and a half and four and a half years,respectively.Use the NPV decision to evaluate this project; should it be accepted or rejected?

• A)NPV = $1,766.55; accept the project
• B)NPV = -$892.19; reject the project
• C)NPV = $1,288.94; accept the project
• D)NPV = -$3,577.90; reject the project

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Definitions:

Superego

Part of the human psyche, according to Freudian theory, that represents internalized ideals and provides standards for judgment (the conscience) and for future aspirations.

Collective Unconscious

A concept proposed by Carl Jung that refers to the part of the unconscious mind which is derived from ancestral memory and experience and is common to all humankind.

Personal Unconscious

A component of Jung’s analytical psychology, referring to all information that is present within an individual's mind, but not readily accessible to immediate consciousness.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology and contributed to the understanding of the psyche, archetypes, and the collective unconscious.