You Are Considering a Project with the Following Data: Internal

question 105

Multiple Choice

You are considering a project with the following data: Internal rate of return 8.7%
Profitability ratio .98
Net present value -$393
Payback period 2.44 years
Required return 9.5%
Which one of the following is correct given this information?

• A) The discount rate used in computing the net present value must have been less than 8.7%.
• B) The discounted payback period will have to be less than 2.44 years.
• C) The discount rate used to compute the profitability ratio was equal to the internal rate of return.
• D) This project should be accepted based on the profitability ratio.
• E) This project should be rejected based on the internal rate of return.

---

Definitions:

Sandwich Generation

The term given to middle-aged people who need to meet the demands of their own children and of aging parents.

Middle-Aged

Referring to the period of adulthood roughly between the ages of 45 and 65, often characterized by stable work and family life.

Social Relationships

Connections between individuals in a society, including friendships, family ties, and professional interactions, which shape social behavior and norms.

Midlife

The period in an adult's life, often considered to range from approximately 40 to 60 years old, characterized by personal, social, and career reevaluations.