Consider the following projects, X and Y, where the firm can only choose one. Project X costs $600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and generates cash flows of $500 and $275 for the next 2 years, respectively. Which investment should the firm choose if the cost of capital is 10 percent?
A) Project X, since it has a higher NPV than Project Y
B) Project Y, since it has a higher NPV than Project X
C) Project X, since it has a lower NPV than Project Y
D) Project Y, since it has a lower NPV than Project X
A) Project X, since it has a higher NPV than Project Y
You might also like to view...
Which conflict management style attempts to find the middle ground and work toward it?
A. avoidance B. compromising C. competitive D. accommodative
A reorganization plan under Chapter 11 of the Bankruptcy Code is essentially a:
A. contract between a debtor and its trustees. B. supervised attempt by the state to solve a debtor's financial problems. C. contract between a debtor and its creditors. D. contract filed voluntarily by the creditors.
The debate over advertising fast food and other "junk foods" to kids is in effect settled, since federal and state laws have put limits on that advertising
a. True b. False
_____ is the descriptionof how people act when they are buying, using, and discarding goods and services for their own personal consumption.
A. Cognitive dissonance B. Observation research C. Survey research D. Consumer behavior