The NewProduct Project Involves an Initial Investment of £400,000

question 23

Multiple Choice

The NewProduct project involves an initial investment of £400,000. The predicted annual cash flow is £150,000 for a four year period, after which the product will be replaced. The required rate of return is 15 per cent. What is the net present value?

• A) - £25,750
• B) £200,000
• C) £35,750
• D) £28,250

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Definitions:

Director of Housing

A position responsible for overseeing housing programs, policies, and services, typically within a governmental or nonprofit organization.

Marginal Benefit (MB) Curves

Graphs that show the additional benefit received from consuming one more unit of a good or service.

Law of Diminishing Marginal Utility

The Law of Diminishing Marginal Utility states that as a person consumes more of a product, the satisfaction (utility) gained from consuming each additional unit decreases.

Slope Downward

A graphical representation indicating a decrease or decline in a variable as another variable increases, common in supply and demand curves.