Peter Is Considering a Project with an Initial Cost of $42,000

question 59

Multiple Choice

Peter is considering a project with an initial cost of $42,000 and annual cash inflows of $9,100 a year for six years. What discount rate, when applied to this project, will produce a profitability index of 1.0?

• A) 7.00%
• B) 7.65%
• C) 7.88%
• D) 8.05%
• E) 8.11%

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Definitions:

Management Skills

Abilities required to effectively direct, control, and plan resources and operations within an organization.

Training

The act of teaching or developing in oneself or others, any skills and knowledge that relate to specific useful competencies.

Experiences

The knowledge or practical wisdom gained from direct participation in events or activities, contributing to personal or professional development.

People Skills

Interpersonal skills that enable an individual to interact effectively and harmoniously with other people.