Worcester Corp Is Considering Two Mandated Projects

question 33

Multiple Choice

Worcester Corp is considering two mandated projects.They would serve the same purpose and be mutually exclusive.The present value of total costs over a five-year period for Project November is $50,000.The present value of total costs over a four-year period for Project December is $40,000.The company uses a discount rate of 9%.Which project should it choose and why?

• A)November because the NPV is higher.
• B)November because EAC is higher.
• C)December because it has a shorter life.
• D)December because it has lower EAC.

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Definitions:

Weed Populations

Groups of unwanted plants that compete with cultivated plants for resources, often in agricultural settings or natural environments.

Gene Duplication

A process by which a region of DNA containing a gene is copied within an organism's genome, leading to genetic diversity.

Gallflies

A group of insects known for their ability to induce gall formation on plants, where they then live and feed.

Intermediate Gall Sizes

Refers to the medium range of sizes for galls, which are abnormal growths on plants caused by various organisms.