Spring Company Has Invested £20,000 in a Project

question 56

Multiple Choice

Spring Company has invested £20,000 in a project. Spring's discount rate is 12% and the profitability index on the project is 1.00. Which of the following statements would be true
I. The present value of the project's net cash flows is £20,000.
II. The project's internal rate of return is equal to 12%.

• A)Only I.
• B)Only II.
• C)Both I and II.
• D)Neither I nor II.

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Definitions:

Ideological Reasoning

The practice of interpreting or justifying events, decisions, or actions based on a set of beliefs or ideological principles.

Critical Thinker

A person who actively questions assumptions, evaluates evidence, and assesses conclusions logically.

Ideological Beliefs

Strongly held systems of ideas and ideals, especially those that form the basis of economic or political theories and policies.

Metaphysical

Metaphysical pertains to the branch of philosophy that explores the nature of reality, including concepts such as existence, the universe, consciousness, and beyond.