You would like to invest in the following project. Victoria, your boss, insists that only projects that can return at least $1.10 in today's dollars for every $1 invested can be accepted. She also insists on applying a 10 percent discount rate to all cash
ﬂows. Based on these criteria, you should:
A) Accept the project because it returns almost $1.22 for every $1 invested.
B) Accept the project because it has a positive PI.
C) Accept the project because the NPV is $2,851.
D) Reject the project because the PI is 1.05.
E) Reject the project because the IRR exceeds 10 percent.

Question

You would like to invest in the following project.  Victoria, your boss, insists that only projects that can return at least $1.10 in today's dollars for every $1 invested can be accepted. She also insists on applying a 10 percent discount rate to all cash
ﬂows. Based on these criteria, you should:
A) Accept the project because it returns almost $1.22 for every $1 invested. 
B) Accept the project because it has a positive PI. 
C) Accept the project because the NPV is $2,851. 
D) Reject the project because the PI is 1.05. 
E) Reject the project because the IRR exceeds 10 percent.

Quizplus · Accepted Answer

The Answer of You would like to invest in the following project.  Victoria, your boss, insists that only projects that can return at least $1.10 in today's dollars for every $1 invested can be accepted. She also insists on applying a 10 percent discount rate to all cash
ﬂows. Based on these criteria, you should:
A) Accept the project because it returns almost $1.22 for every $1 invested. 
B) Accept the project because it has a positive PI. 
C) Accept the project because the NPV is $2,851. 
D) Reject the project because the PI is 1.05. 
E) Reject the project because the IRR exceeds 10 percent.

You Would Like to Invest in the Following Project