Project I Has an Initial Cash Outflow of $18,300 and Annual

question 39

Multiple Choice

Project I has an initial cash outflow of $18,300 and annual cash flows of $8,700 for Years 1 to 3.Project II has an initial cash outflow of $25,400 and annual cash flows of $10,500 for Years 1 to 3.These projects are mutually exclusive.The required rate of return is 11 percent.Based on the incremental NPV_{(II - I) ,} which project(s) should be accepted and why?

• A)Project II;because the incremental NPV_{(II - I)} is negative
• B)Project I;because both the incremental NPV_{(II - I)} and NPV_I are positive
• C)Both Project I and II;because both project NPVs are positive
• D)Project II;because it has the larger NPV
• E)Project I;because the incremental NPV_{(II - I)} is negative and NPV_I is positive

---

Definitions:

Extravert

An extravert is a person who is characterized by their outgoing, sociable, and energetic behavior, typically seeking stimulation from the external world.

Extraversion Introversion

A dimension of personality describing an individual's level of sociability and preference for outer activity versus inner reflection.

Stimulating Environment

Surroundings that provide intellectual, sensory, or social stimulation, contributing to cognitive and emotional growth and well-being.

External Disturbances

Events or influences originating outside a system or individual that can cause changes or disruptions in behavior or processes.