A Capacity Alternative Has an Initial Cost of $50,000 and Cash

question 85

Multiple Choice

A capacity alternative has an initial cost of $50,000 and cash flow of $20,000 for each of the next four years.If the cost of capital is 5 percent,what is the approximate net present value of this investment?

• A)$20,920
• B)$26,160
• C)$49,840
• D)$70,920
• E)$106,990

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Definitions:

Legislative Delegation

The process by which legislative authorities give regulatory agencies the power to create rules and regulations based on the statutes the legislature has enacted.

Injunction

A court order requiring a party to do or refrain from doing specific acts, often issued to protect a plaintiff's rights while a case is pending.

Federal Supremacy

The ability of federal laws to defeat inconsistent state laws in case they conflict.

Judicial Activism

The actions of a court that goes beyond its established legal boundaries, often seen in the creation of new legal precedents or in making decisions based on personal or political considerations rather than existing law.