Angie Is Evaluating a Proposed Project and Wants to Answer

question 37

Multiple Choice

Angie is evaluating a proposed project and wants to answer two questions.First,what is the market value of the project? Second,how much profit will the project produce in relation to its book value.To answer these two questions,Angie should use which one of the following sets of investment analysis methods?

• A)internal rate of return and payback
• B)payback and profitability index
• C)net present value and average accounting return
• D)net present value and payback
• E)profitability index and net present value

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Definitions:

Over 45

Referring to individuals or entities that are more than 45 years old or to quantities greater than 45 in number.

Probability Assignment Rule

A principle that assigns probabilities to outcomes of a random experiment, ensuring the sum of the probabilities equals one.

Total Probability Rule

A fundamental rule in probability theory that allows for the calculation of the total probability of an outcome by considering all possible ways that outcome can occur.

Law of Large Numbers

A statistical principle that states that as a sample size grows, its mean gets closer to the average of the whole population.