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

question 117

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 IRR's for this project are negative.
• B) It is not possible to compute 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.

---

Definitions:

Entitlements

Rights or benefits that individuals are granted according to law or agreement.

Social Entrepreneurs

Individuals who recognize a societal problem and use entrepreneurial principles to organize, create, and manage a venture to achieve social change.

Traditional Entrepreneurs

Individuals who start and manage businesses to achieve financial profits, following conventional business models and practices.

Edelman Trust Barometer

An annual survey that measures the public's trust in institutions such as media, government, NGOs, and businesses.