Project Black Swan Requires an Initial Investment of $115,000

question 66

Multiple Choice

Project Black Swan requires an initial investment of $115,000. It has positive cash flows of $140,000 for each of the next two years. Because of major demolition and environmental clean-up costs, cash flow for the third and final year of the project is $(170,000) . If the company 's required rate of return is 12%, the project should be

• A) rejected because the IRR is less than 12%.
• B) accepted because the NPV is positive at 12%.
• C) the project is unacceptable at any discount rate.
• D) rejected because there may be more than one IRR.

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Definitions:

SUB Instruction

An operation in programming and computing that subtracts one value from another or more values and returns the result.

Shipped Parts

Components or items that have been packaged and dispatched to a destination as part of a delivery or supply chain process.

NEQ Instruction

An instruction in programming that stands for "Not Equal To," used to compare two values and proceed based on them not being equal.

Logically True

A condition in logical operations where the statement or logic evaluates to true, indicating that the criteria for the operation have been met.