The Following Show Four Mutually Exclusive Investments

question 28

Multiple Choice

The following show four mutually exclusive investments.Which is the best investment?

• A)Initial investment: $1.1 million; Cash flow in year 1: $160,000; Annual Growth Rate: 2%; Cost of Capital: 9.0%
• B)Initial investment: $1.2 million; Cash flow in year 1: $150,000; Annual Growth Rate: 2%; Cost of Capital:7.0%
• C)Initial investment: $1.3 million; Cash flow in year 1: $160,000; Annual Growth Rate: 1%; Cost of Capital: 6%
• D)Initial investment: $1.4 million; Cash flow in year 1: $150,000; Annual Growth Rate: 2%; Cost of Capital: 8%
• E)Initial investment: $1.5 million; Cash flow in year 1: $160,000; Annual Growth Rate: 1.5%; Cost of Capital: 7%

---

Definitions:

Pressure

The force applied perpendicular to the surface of an object per unit area over which that force is distributed.

Proprioception

The sense allowing a person to perceive the position and movement of their body parts without using sight, contributing to balance and coordination.

Conscious Awareness

The mental state of being actively aware of one's surroundings, thoughts, and feelings.

Sensory Receptors

Specialized cells or nerve endings that respond to changes in the environment and transmit signals to the central nervous system.