Reference no: EM132632763

Problem 1: Which of the following could be a sunk cost?

Group of answer choices

Option 1: Irrational decision-making that led to a transaction.

Option 2: The expected economic loss of a transaction.

Option 3: All of these answers.

Option 4: The original cost of the item.

Problem 2: When evaluating the cash flows from a project, a financial manager needs to analyze the:

Group of answer choices

Option 1: The benefits of the project

Option 2: The costs of the project

Option 3: The costs and benefits of the project

Option 4: costs, benefits, and opportunity costs of the project.

Problem 3: A project has an initial investment requirement of $100,000. In year 1, it should earn $25,000; in year two, $30,000; and in year 3, $50,000. What is the project's internal rate of return?

Group of answer choices

Option 1: 6

Option 2: 6.5%

Option 3: 5%

Option 4: 7.5%