The Net Present Value of a Project's Cash Inflows Is

question 26

Multiple Choice

The net present value of a project's cash inflows is $2,716 at a discount rate of 12 percent.The profitability index is 1.09 and the firm's tax rate is 34 percent.What is the initial cost of the project?

• A)$2,314.07
• B)$2,018.50
• C)$2,428.32
• D)$2,491.74
• E)$2,066.67

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price point, over a specific time period.

Market Prices

The amount of money required to purchase a good or service in a market.

Quantities Demanded

The total amount of a good or service that consumers are willing and able to purchase at a particular price in a given market.

Substitute Products

Products that can serve as replacements for each other; when the price of one increases, the demand for the substitute is likely to increase.