Daniel's Market Is Considering a Project with an Initial Cost

question 88

Multiple Choice

Daniel's Market is considering a project with an initial cost of $176,500.The project will not produce any cash flows for the first three years.Starting in Year 4, the project will produce cash inflows of $127,500 a year for three years.This project is risky, so the firm has assigned it a discount rate of 17 percent.What is the project's net present value?

• A)$105,222
• B)-$6,500
• C)$ 29,301.80
• D)$ 621.30
• E)-$601.03

---

Definitions:

Social Needs

The essential requirements for individuals to feel accepted, valued, and connected within a community or society.

Incentive Theories

Incentive theories suggest that behavior is motivated by a desire for external rewards or incentives.

Drive Theories

Theories suggesting that behavior is motivated by the desire to reduce internal tension caused by unmet biological needs.

Social Motives

The psychological forces that drive individuals to interact, affiliate, or connect with others.