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

question 42

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.

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

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Definitions:

Global Retail Development Index

An annual study that ranks countries based on the attractiveness and potential of their retail markets for investment by retail companies.

Trade Surplus

A situation where a country exports more goods and services than it imports, leading to a positive balance of trade.

Exporting

Producing goods in one country and selling them in another.

Joint Venture

Formed when a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control, and profits are shared.