Two Mutually Exclusive Projects, Expected to Last Indefinitely, Are Being

question 21

Multiple Choice

Two mutually exclusive projects, expected to last indefinitely, are being compared. Program A has annual profits and consumer surplus of $10 million and a one-time capital expenditure of $50 million. Program B has consumer surplus of $15 million and a one-time capital expenditure of $100 million. Using net present value as a criterion, which alternative should be selected?

• A) If the discount rate is 12%, Program B should be selected.
• B) If the discount rate is less than 10%, Program B should be selected.
• C) If the discount rate is 22%, neither program should be selected.
• D) The programs have the same net present value regardless of the discount rate used.
• E) Answers if the discount rate is less than 10%, Program B should be selected and if the discount rate is 22%, neither program should be selected are both correct.

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Definitions:

Cultural Constructions

The ways in which cultures are understood, created, and perpetuated through social practices, beliefs, and institutions.

Transgender

Individuals whose gender identity or expression differs from the sex they were assigned at birth.

Consistent Gender Identity

A stable sense of one's gender over time, which aligns with one's gender expression or assigned sex.

Biological Female

An individual whose sex assigned at birth is female, based on biological characteristics such as chromosomes, hormones, and reproductive anatomy.