-You Are Considering Two Mutually Exclusive Projects with the Following

question 25

Multiple Choice

-You are considering two mutually exclusive projects with the following cash flows.Which project(s) should you accept if the discount rate is 8.5 percent? What if the discount rate is 13 percent?

• A) accept project A as it always has the higher NPV
• B) accept project B as it always has the higher NPV
• C) accept A at 8.5 percent and B at 13 percent
• D) accept B at 8.5 percent and A at 13 percent
• E) accept B at 8.5 percent and neither at 13 percent

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Definitions:

Human Behaviour

Encompasses a range of actions and mannerisms exhibited by humans, influenced by culture, attitudes, emotions, values, ethics, authority, rapport, hypnosis, persuasion, coercion, and genetics.

Null Hypothesis

Proposes that a prediction made from a given theory is false. Experiments (and other research strategies) are set up not to prove the worth of a theory, but rather to reject (or fail to reject) the null hypothesis. Thus, theories gain in strength because alternative explanations are rejected.

Experiment

A scientific procedure in which variables are manipulated and the effects on other variables are gauged. Large groups of subjects are generally used, and the results are analyzed statistically. In a true experiment, subjects are randomly assigned to experimental and control groups.

Rejection Hypothesis

The theory proposing that the experience of rejection, or anticipated rejection, by significant others or society can lead to negative psychological outcomes.