Problem:

In your role as strategic management accountant, you have completed a financial analysis of a project. The project is:

Accounting Rate of Return (ARR) is 10 percent.

Payback period is seven years

Net Present Value (NPV) is $1million and

Internal Rate of Return (IRR) is 12 percent

Based on these results, which one of the following statements is correct?

A. The project will increase the value of the organization

B. The organization's discount rate used to calculate NPV is greater than 12 percent

C. The project risk is moderate

D. The project will increase the organization's Return on Investment (ROI)

Summary of problem:

This multiple choice question belongs to Finance and it discusses about the financial analysis of a project.