Phoenix Products Inc

question 14

Multiple Choice

Phoenix Products Inc.requires a new machine to produce a part for a solar air conditioner.Two companies have submitted bids, and you have been assigned the task of choosing one of the machines.Cash flow analysis indicates the following: If the required rate of return for Phoenix Products is 5 percent, which of the following is the most valid statement?

• A) The NPV_A < NPV_B, therefore accept Machine B.
• B) The NPV_A > NPV_B, therefore accept Machine A.
• C) The IRR_A > IRR_B, therefore accept Machine A.
• D) The IRR_A < IRR_B, therefore accept Machine B.
• E) Take neither A nor B since the required rate of return is greater than the internal rate of return

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Definitions:

Adolescents

Individuals in the developmental stage between childhood and adulthood, typically between the ages of 13 and 19.

Negative

A term often used to describe the absence of a certain condition or the reversal of a normal or positive state.

Secular Trend

A long-term trend or pattern observed in data, which is not influenced by seasonal, cyclical, or irregular factors.

Puberty

The developmental phase in which children mature sexually and physically into adults, marked by hormonal changes and growth.