An Initial Investment of $400,000 Is Expected to Produce an End-Of-Year

question 53

Multiple Choice

An initial investment of $400,000 is expected to produce an end-of-year cash flow of $480,000. What is the NPV of the project at a discount rate of 20 percent?

• A)$176,000
• B)$80,000
• C)$0 (zero)
• D)$64,000

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Definitions:

Chronological Order

The arrangement of events, dates, or actions in the order that they occurred or will occur, from earliest to latest.

Journal Entry

A record in accounting that represents a transaction and its effect on various accounts, used to transfer sums from one account to another.

Transaction Analysis

This is the process of reviewing and analyzing a company's transactions to determine their effects on its financial statements.

IFRS

International Financial Reporting Standards are a set of accounting rules and standards that determine how transactions and other accounting events should be reported in financial statements globally.