For a Project with an Initial Investment of $40,000 and Cash

question 380

Multiple Choice

For a project with an initial investment of $40,000 and cash inflows of $11,000 a year for five years, calculate NPV given a required return of 11.65%.

• A) -$1,205
• B) -$1,103
• C) -$1.23
• D) $567
• E) $1,218

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Definitions:

Operating, Normal Business Activities

Transactions and events that directly affect the provision of goods or services to customers.

Statement of Financial Position

A financial statement that details an organization's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial health.

Retained Earnings

The portion of a company's profits that are kept or retained rather than distributed to shareholders or used to pay off debt.