Question

project x has an initial cost of $20,000 and a cash inflow of $25,000 in year 3. project y costs $40,700 and has cash flows of $12,000, $25,000, and $10,000 in years 1 to 3, respectively. the discount rate is 6 percent and the projects are mutually exclusive. based on the individual project's irrs you should accept project ; based on npv you should accept project ; the final decision should be to accept project . multiple choice y; y; y y; x; x x; y; y x; x; x y; x: y

Answer 1

Project X has a $20,000 start-up cost and a $25,000 cash inflow in year 3. Project Y has a $40,700 cost and generates cash flows of $12,000, $25,000, and $10,000 over the course of its first three years. The projects are mutually exclusive, and the discount rate is 6%. You should approve the project in the end based on the irrs and npv of each individual project as well as your own assessment of those factors. X;Y:Y.

Start-up costs are the costs a business spent or incurred to establish an active trade or business, or to research establishing or acquiring an active trade or business. Start-up costs are sums paid or expended in connection with a current profitable activity that is intended to generate money prior to the activity becoming a fully operational trade or business. Equipment, incorporation fees, insurance, wages, and taxes are just a few of the startup costs. Although startup costs will differ depending on your business's industry and type, an expense for one firm might not be applicable to another. It helps you effectively launch your firm and maintain profitability after your doors are open to understand your expenses and how you will manage them.

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