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 3 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.
Answer: D
You might also like to view...
Jamal and Ronee Smith, both age 49, are married and filed a joint return for 2016. Jamal earned a salary of $100,000 in 2016 from his job at Sunshine Corporation. Ronee earned $6,500 from her part-time job at Rain Corporation. On March 1, 2016, Jamal contributed $5,500 to a Roth IRA for himself. What is the maximum contribution Ronee may make in 2016 to her Roth IRA?
a) $0 b) $12,000 c) $1,000 d) $5,500
Which of the following is not considered a cost for administering the accounts receivable?
A) analyzing credit B) increased holdings C) sending out bills D) collecting past due accounts