A Prospective Project Under Consideration by the Internet Division of Communications

question 26

Multiple Choice

A prospective project under consideration by the Internet Division of Communications Corporation.has an estimated residual income of $(20,000) .If the project requires an investment of $400,000,the

• A)project generates a negative return on investment.
• B)project's return on investment is zero.
• C)project's return on investment is 5% less than the company's target rate.
• D)company's target rate is 15%

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Definitions:

Expenditures

The total amount of money spent by an individual, firm, or government on goods and services.

Income

The earnings acquired, often periodically, for performing job duties or from investment gains.

Net Exports

The value of a country's total exports minus its total imports, representing the net amount of goods and services being traded with other countries.

GDP Deflator

An indicator used to determine the price levels of newly produced domestic final goods and services, assisting in the conversion of nominal GDP to real GDP.