1. Which of the following best described the term "Too big too fail" doctrine
A) A drastic increase in the money supply
B) Decrease in the cost of credit
C) The government's rescue of the banking system (Macroeconomic repercussions)
D) A decline in the stock market
2. A project has an initial cost of $51,900 and cash flows of $18,700, $56,500, and –$9,100 for Years 1 to 3, respectively. If the required rate of return for this investment is 17 percent, should you accept it based solely on the internal rate of return rule? Why or why not?
A) No, because the IRR is a negative rate of return.
B) No, because the IRR is less than the required return.
C) You cannot apply the IRR rule in this case because there are multiple IRRs.
D) Yes, because the IRR is a positive rate of return.
E) Yes, because the IRR exceeds the required return.