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:

Accumulated Deficit

Accumulated deficit is a negative balance in retained earnings, indicating that a company's losses have exceeded its profits over time.

Statement Of Financial Position

A financial statement that shows the assets, liabilities, and equity of an entity at a specific point in time, providing a snapshot of its financial condition.

Net Debt

A financial metric calculated by subtracting total cash and cash equivalents from total debt, indicating a company's ability to pay off its debts if they were all due immediately.

Non-Business Organization

An entity that operates for purposes other than making a profit, such as charities, educational institutions, and government agencies.