A Firm Is Evaluating Two Independent Projects Utilizing the Internal

question 100

Multiple Choice

A firm is evaluating two independent projects utilizing the internal rate of return technique. Project X has an initial investment of $80,000 and cash inflows at the end of each of the next five years of $25,000. Project Z has a initial investment of $120,000 and cash inflows at the end of each of the next four years of $40,000. The firm should

• A) accept both if the cost of capital is at most 15 percent.
• B) accept only Z if the cost of capital is at most 15 percent.
• C) accept only X if the cost of capital is at most 15 percent.
• D) none of the above

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Definitions:

Fundamental Attribution Error

The tendency to overestimate the impact of personal traits and underestimate the influence of situations when explaining others' behaviors.

Scheduled Work Break

A specified interval during work designated for rest or leisure.

Lazy

A descriptor for a lack of effort or motivation to engage in activities or work, often characterized by procrastination or avoidance.

Fired

The termination of an individual's employment due to performance issues, misconduct, or other reasons decided by the employer.