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

question 113

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 years of the project is $170,000.

• A)All possible IRRs for this project are negative.
• B)It is not possible to calculate an IRR for this project.
• C)The project is unacceptable at any required rate of return.
• D)This project might have more than one IRR.

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Definitions:

Assumption Of Risk

This is a legal doctrine where an individual knowingly exposes themselves to danger and is thus responsible for any resulting injuries.

Strict Product Liability

A legal doctrine holding manufacturers and sellers accountable for distributing defective goods, regardless of fault.

Product Liability

Product liability refers to the legal responsibility of a manufacturer or vendor for selling a faulty product that causes injury or harm to a consumer.

Assembled Improperly

Refers to the incorrect or faulty assembly of parts or components, often leading to malfunction or inefficiency.