Calculate the NPV of a 20-Year Project with a Cost

question 96

Multiple Choice

Calculate the NPV of a 20-year project with a cost of $400,000 and annual cash flows of $50,000 in years 1-10 and $25,000 in years 11-20. The company's required rate of return is 10%.

• A) ($33,547)
• B) ($18,547)
• C) $0
• D) $18,547
• E) $33,547

---

Definitions:

Personal ties

Relationships between individuals that are based on emotional bonds, shared experiences, or mutual interests.

Divorce

The legal dissolution of a marriage by a court or other competent body, officially ending the relationship.

Divorce rates

The statistical measure of the number of divorces occurring within a defined population during a given time period.

Stepchildren

Children of one's spouse from a previous relationship.