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

question 25

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.The company accepts all projects with a payback period of two years or less.

• A)The payback rule would reject this project because of its risks are too high.
• B)The payback rule would reject this project because all negative cash flows are added together.
• C)If strictly applied, the payback rule would reject this project.
• D)If strictly applied, the payback rule would accept this project.

---

Definitions:

Goodwill Presentations

Presentations aimed at building or maintaining a positive image of an organization or individual among its audience.

Tone of Voice

The quality or pitch of a spoken sound that conveys the speaker's feelings or intentions, also applicable in written communication through word choice and style.

Stress

Emphasis given to one or more words in a sentence, or one or more ideas in a message.

Inflection

The modulation or change in the pitch or tone of a voice, which can convey different meanings or emotions in spoken language.