Final answer:
The provided information indicates that the project's cash inflows are less than its initial investment, leading to negative cash flows. The given options do not relate directly to this basic financial assessment of the project.
Step-by-step explanation:
The question provided deals with a business project's cash flows and initial investment to ascertain its financial desirability. The project shows expected cash inflows of $7.8 million and requires an initial investment of $9.2 million. This implies that, without considering other factors such as the time value of money, the project currently has negative cash flows, as the inflows are less than the outlays.
Therefore, none of the options provided as 'a. $102 million.' or 'b. If the interest rate is 9%, the cost of financial capital, and the firm can capture the 5% return to society, the firm would invest as if its effective rate of return is 4%, so it will invest $183 million.' are directly relevant to explaining the basic financial position of the project described in the question.The correct answer is a. $102 million.The expected cash inflows of $7.8 million in today's dollars are less than the initial investment of $9.2 million. Therefore, the project is not profitable and would result in a loss of $1.4 million. Hence, the statement 'the project's initial investment is $9.2 million' is true.