A Project Requires an Investment of $900 Today

question 20

Multiple Choice

A project requires an investment of $900 today. It can generate sales of $1,100 per year forever. Costs are $600 for the first year and will increase by 20 percent per year. (Assume all sales and costs occur at year-end [i.e., costs are $600 @ t = 1].) The project can be terminated at any time without cost. Ignore taxes and calculate the NPV of the project at a 12 percent discount rate.

• A)$65.00
• B)$57.51
• C)$100.00
• D)It cannot be calculated as g > r.

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Definitions:

Primary Circular Reactions

Early infantile behaviors observed in the sensorimotor stage, involving repetitive actions that focus on the infant's own body.

Simple Reflexes

Unlearned responses or actions executed by infants automatically in reaction to specific stimuli.

Primary Circular Reactions

Early repetitive behaviors observed in infants, centered on their own bodies, serving as a foundational mechanism for learning and developing new skills.

Tertiary Circular Reactions

The stage in Piaget's theory of cognitive development where infants explore their environment and learn through trial and error experimentation.