Consider the following project-balance profiles for proposed investment projects:

Now consider the following statements:
Statement 1: For Project A, the cash flow at the end of year 2 is $100.
Statement 2: The future value of Project C is $0.
Statement 3: The interest rate used in the Project B balance calculations is 25%.
Which of the preceding statements is (are) correct?
(a) Just statement 1.
(b) Just statement 2.
(c) Just statement 3.
(d) All of them.

Transcribed Image Text:

Project Balances Project A Project B Project C -$600 -$500 -$200 $200 $300 $0 $300 $650 $150 2 $416 PW Rate used 15%