CORRECT ANSWER C. HOBART WOULD ACCEPT THE PROJECT UNDER BOTH TH...

331.

Correct answer c. Hobart would accept the project under both the internal rate of return of

20% which exceeds the hurdle rate of 15% and the payback period of 2.7 years ($200,000 ÷

$74,000) which is less than the company’s 3-year benchmark.