Use the Information for the Question(s)below

question 89

Multiple Choice

Use the information for the question(s) below.
Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy,with each outcome being equally likely.The initial investment required for the project is $80,000,and the project's cost of capital is 15%.The risk-free interest rate is 5%.
-The NPV for this project is closest to:

• A)$6250.
• B)$14,100.
• C)$10,000.
• D)$18,600.

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Definitions:

Appalachian Mountains

A mountain range in eastern North America extending from Canada to Alabama, offering significant biodiversity and recreational activities.

Navigation Rights

Legal rights or privileges concerning the passage of ships or boats through specific waterways, often key to trade, military, and transportation activities.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power, typically measured as an annual percentage increase.

Nation's Currency

The system of money in general use in a particular country, representing the medium of exchange and basis for trade.