You Have a Choice Between Two Projects, Project1 Pays $12,000

question 50

Multiple Choice

You have a choice between two projects, Project1 pays $12,000 back at the end of 1 period on an investment of $10,000. Project 2 pays back $6,500 at the end of 1 period on an investment of $5,000. Which project should be chosen and what is the problem that you must be concerned with in this choice?

• A) Project 1; discount rate.
• B) Project 2; discount rate.
• C) Project 1; project scales.
• D) Project 2; project scales.
• E) Project 1, cash flow timings.

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Definitions:

Prototype

A typical or preliminary model of something, especially a concept, process, or product, that serves as a basis for further development.

Prototype

An original model or first example of something from which other forms are copied or developed.

Blue Jay

A medium-sized bird known for its vibrant blue color and loud calls, native to North America.

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A flightless bird native to the Southern Hemisphere, known for its distinctive black and white plumage and ability to swim.