Project a Has an Expected Cash Flow of $500,000 at the End

question 93

Multiple Choice

Project A has an expected cash flow of $500,000 at the end of year 5.Project B has an expected cash flow of $100,000 to be received at the end of each year for the next five years.What can be said of the net present value of project A compared to project B?

• A)They are the same because both cash flows total $500,000 over the lives of the projects.
• B)Project A is preferred because of the largest lump-sum payment in year 5.
• C)Project B is preferred because of the periodic payments made consistently throughout the years and are made earlier.
• D)The both have the same internal rate of return and either should be accepted.

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Definitions:

Resist Unethically

The act of opposing or defying through morally questionable means or for unethical purposes.

Lose the Job

Losing the job refers to the involuntary termination of an individual's employment, commonly due to layoffs, company downsizing, or dismissal.

Buy Time

A strategy aimed at delaying something in hopes of finding a better solution or to wait for a more opportune moment.

Win-Win Solutions

Situations or agreements that provide benefits to all involved parties.