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You Are Considering Two Projects with the Following Cash Flows

question 24

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You are considering two projects with the following cash flows:  Project A  Project B  Year 1 $2,500$4,000 Year 2 3,0003,500 Year 3 3,5003,000 Year 4 4,0002,500\begin{array} { l l l } & \text { Project A } & \text { Project B } \\& & \\\text { Year 1 } & \$ \mathbf { 2 , 5 0 0 } & \mathbf { \$ 4 , 0 0 0 } \\\text { Year 2 } & \mathbf { 3 , 0 0 0 } & \mathbf { 3 , 5 0 0 } \\\text { Year 3 } & \mathbf { 3 , 5 0 0 } & \mathbf { 3 , 0 0 0 } \\\text { Year 4 } & \mathbf { 4 , 0 0 0 } & \mathbf { 2 , 5 0 0 }\end{array} Which of the following statements are true concerning these two projects?
I.Both projects have the same future value at the end of year 4, given a positive rate of return.
II.Both projects have the same future value given a zero rate of return.
III.Both projects have the same future value at any point in time, given a positive rate of return.
IV.Project A has a higher future value than project B, given a positive rate of return.

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Definitions:

Bonus Payment

Additional remuneration given to employees as a reward for their performance, beyond their normal salary.

Religious Discrimination

Unfair or prejudicial treatment of individuals or groups based on their religious beliefs or practices.

Title VII

A section of the Civil Rights Act of 1964 prohibiting employment discrimination based on race, color, religion, sex, and national origin.

Physical Force

The exertion of energy or strength upon an object or person, often resulting in a physical impact or change.

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