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.

---

Definitions:

Constructs

Psychological concepts or categories used to understand and interpret the world, often unique to each individual, as proposed by George Kelly.

Construct Systems

Theoretical frameworks used to understand and predict how people perceive, interpret, and interact with the world around them.

Kelly's Personal Construct Theory

A psychological theory proposing that individuals interpret the world and construct their own realities using personal constructs.

Freedom of Choice

The power or right to make one's own decisions without constraint, typically within legal parameters.