Boston Corp Which Project Represents the Best Investment for Boston?
A) Project

question 46

Multiple Choice

Boston Corp. is evaluating three projects. Each project will return a total of $600,000 to the company in cash flows over a three-year period. The cash flows for the three projects are as follows: $$\begin{array} { | l c c c c } \hline& \text { Year 1 } & \text { Year 2 } & \text { Year 3 } & \text { Tatal } \\\text { Praject A } & \$ 300,000 & \$ 200,000 & \$ 100,000 & \$ 600,000 \\\text { Praject B } & 200,000 & 200,000 & 200,000 & 600,000 \\\text { Praject C } & 100,000 & 200,000 & 300,000 & 600,000 \\\hline\end{array}$$ Which project represents the best investment for Boston?

• A) Project A
• B) Project B
• C) Project C
• D) All projects are equally good investments.

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Definitions:

Normal Distribution

A distribution of probabilities that is even around the average, indicating that occurrences close to the mean happen more often.

Sample

A subset of the population.

Test Statistic

A metric derived from data in a sample during a hypothesis testing process, employed to decide if the null hypothesis should be discarded.

Proportions

Ratios indicating the fractional part of a whole that have specific characteristics.