Project H Requires an Initial Investment of $100,000 and the Produces

question 89

Multiple Choice

Project H requires an initial investment of $100,000 and the produces annual cash flows of $45,000 per year for each of the next three years.Project T also requires an initial investment of $100,000 and produces cash flows of $30,000 in year 1, $40,000 in year 2, and $70,000 in year 3.If the discount rate is 10% and the projects are not mutually exclusive

• A)Project H should be chosen.
• B)Project T should be chosen.
• C)H and T are equally attractive.
• D)Both projects should be accepted.

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Definitions:

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