Compute the NPV for Project X with the Cash Flows

question 36

Multiple Choice

Compute the NPV for Project X with the cash flows shown as follows if the appropriate cost of capital is 10 percent.
$$\begin{array} { l c c c c c c } \text { Time } & 0 & 1 & 2 & 3 & 4 \\\text { Cash Flow } & - \$ 100,000 & \mathbf { \$ 3 6 , 0 0 0 } & \mathbf { \$ } 200,000 & \mathbf { \$ 2 1 0 , 0 0 0 } & \mathbf { \$ } 10,006\end{array}$$

• A) $183,507.96
• B) $247,410.67
• C) $248,962.50
• D) $262,622.77

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Definitions:

Confidence Interval

A spread of statistical figures, obtained by analyzing samples, seen as encompassing the unseen value of a population parameter.

Standard Deviation

An index to assess the range of fluctuation or deviation in a series of numbers.

Daily Sales

The total revenue or units sold by a business during a single day.

Teleprocessing Transactions

Transactions carried out over a telecommunications network, commonly involving data exchange between computers.