An Investor Is Considering a Project That Will Generate $900,000

question 68

Multiple Choice

An investor is considering a project that will generate $900,000 per year for four years. In addition to upfront costs, at the completion of the project at the end of the fifth year there will be shut-down costs of $400,000. If the cost of capital is 4.4%, based on the MIRR, at what upfront costs does this project cease to be worthwhile?

• A) $2.62 million
• B) $2.91 million
• C) $3.21 million
• D) $3.50 million

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Definitions:

Cultural Universals

Elements, patterns, traits, or institutions that are common to all human cultures worldwide.

Functionalist Perspective

A viewpoint within sociology that emphasizes the role that each part of society plays in maintaining the stability and functioning of the whole.

Ethnocentrism

The tendency to view one’s own culture as superior to all others.

Cultural Relativism

The principle that an individual's beliefs and activities should be understood in terms of their own culture, rather than judged against the criteria of another.