A Project Requires a Current Expenditure of $300 and Expects

question 70

Multiple Choice

A project requires a current expenditure of $300 and expects to generate $100 cash inflows at the end of each of the next 5 years.What conclusion can be drawn from examining an NPV profile for this project?

• A) Accept the project if the cost of capital exceeds 20%
• B) Accept the project if the cost of capital is below 20%
• C) Reject the project if the cost of capital exceeds 10%
• D) Reject the project if the cost of capital exceeds 7%
• E) Reject the project if the cost of capital exceeds 5%

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Definitions:

Tangible Costs

Readily identifiable costs that can be measured with some precision.

Intangible Costs

A category of location costs that cannot be easily quantified, such as quality of life and government.

Competitiveness

The ability of a company, sector, or nation to offer products and services that meet the quality standards of the local and global markets at competitive prices.

Corruption

The abuse of entrusted power for private gain, often undermining integrity and fairness in various sectors.