A Project Has an Anticipated Stream of Annual Net Receipts

question 22

Multiple Choice

A project has an anticipated stream of annual net receipts of $20,000. Its life is 6 years. No salvage value is expected at the end of the 6 years. Compute the net present value of the project, if its price is $80,000 and the applicable discount rate is 10%.

• A) -68,710.00
• B) -44,568.00
• C) 7,106.00
• D) 74, 312.00
• E) 87,106.00

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Definitions:

Budget Constraint

Represents the combination of goods and services that a consumer can purchase given current prices and their income.

CDs

Compact Discs, a digital optical disc data storage format used for storing digital data.

Budget Constraint

The limitation on the consumption patterns of individuals or entities based on their income and the prices of goods and services.

Points Along

Specific locations identified on a graph or line that represent data points or positions related to a particular value.