Table 11.11 Yong Importers,an Asian Import Company,is Evaluating Two Mutually Exclusive Projects,A

question 39

Multiple Choice

Table 11.11
Yong Importers,an Asian import company,is evaluating two mutually exclusive projects,A and B.The relevant cash flows for each project are given in the table below.The cost of capital for use in evaluating each of these equally risky projects is 10 percent.
-Which project should be chosen on the basis of the normal NPV approach? (See Table 11.11)

• A)Project A because its NPV is higher
• B)Project B because its NPV is higher
• C)Project A because its IRR is higher
• D)Project B because its IRR is higher

---

Definitions:

Economic Communities

Groups of countries or regions that band together to form closer economic ties, typically through trade agreements and shared regulations.

Free Trade Zones

Specially designated areas within countries where goods can be imported, handled, manufactured, or reconfigured without being subject to customs duty, to encourage trade and investment.

Standardization Strategies

Approaches adopted by companies to make their products or services uniform across different markets to achieve cost efficiency and brand consistency.

Adaptation Strategies

Involves adjusting business strategies or products to accommodate changes in the market, environment, or consumer behavior.