ABC Corp Is Considering an Investment Project That Costs $500 Today

question 73

Multiple Choice

ABC Corp. is considering an investment project that costs $500 today. It expects the project will yield income of $200 at the end of years 1, 2, and 3. If the interest rate is 10%, the firm

• A) should undertake the investment.
• B) should forgo the investment.
• C) is just indifferent between undertaking the investment and not.
• D) indeterminate from the given information

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