Consider the Following Projects, X and Y, Where the Firm

question 93

Multiple Choice

Consider the following projects, X and Y, where the firm can only choose one. Project X costs $600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and generates cash flows of $500 and $275 for the next 2 years, respectively. Which investment should the firm choose if the cost of capital is 10 percent?

• A) Project X.
• B) Project Y.
• C) Neither.
• D) Not enough information to tell.

---

Definitions:

Bryophytes

Nonvascular plants including mosses, liverworts, and hornworts.

Green Algae

A large group of photosynthetic eukaryotic organisms that include many types of seaweed and many unicellular forms.

Seedless Plants

Plants that reproduce without the formation of seeds, such as ferns and mosses.

Gametangia

Gametangia are specialized organs or cells in fungi and plants where gametes are formed, playing a crucial role in sexual reproduction.