Markman & Sons Is Considering Projects S and L

question 7

Multiple Choice

Markman & Sons is considering Projects S and L.These projects are mutually exclusive, equally risky, and not repeatable and their cash flows are shown below.If the decision is made by choosing the project with the higher IRR, how much value will be forgone? Note that under certain conditions choosing projects on the basis of the IRR will not cause any value to be lost because the project with the higher IRR will also have the higher NPV, i.e., no conflict will exist.

• A) $5.47
• B) $6.02
• C) $6.62
• D) $7.29
• E) $7.82

Apply the correct hypothesis testing procedure based on the characteristics of the data (distribution, sample size, matched vs. independent samples).

Understand the implications of significance levels and p-values in hypothesis testing.

Understand the application and interpretation of the Wilcoxon Signed-Rank test for comparing the locations of two population distributions.

Differentiate between various nonparametric tests and their applications.

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