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

question 63

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 PI decision to evaluate this project; should it be accepted or rejected?

• A) PI = 6.94 percent; reject the project
• B) PI = −7.52 percent; reject the project
• C) PI = −4.21 percent; reject the project
• D) PI = 5.33 percent; accept the project

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Definitions:

Commitment

The psychological state or quality of being dedicated to a cause, activity, or job; wholehearted devotion.

Development Levels

Stages that represent the degree of competence and commitment of individuals or groups in a learning or operational context.

Flexibility

The ability to adapt to new, different, or changing requirements and conditions effectively.

Leadership Style

The characteristic manner in which a leader guides, motivates, and manages their followers or team members.