What Is the Net Present Value of a Project That

question 38

Multiple Choice

What is the net present value of a project that has an initial cost of $25,000 and produces cash inflows of $ 5,500 a year for 8 years if the discount rate is 7 percent?

• A)$ 3,635.04
• B)$ 6,500.00
• C)$ 7,842.14
• D)$ 6,189.34
• E)$ 5,712.03

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Definitions:

Real GDP

The measure of the value of economic output adjusted for price changes (inflation or deflation), providing a more accurate reflection of an economy's size and growth.

Energy Consumption

The amount of energy used by devices, systems, or processes, typically measured over a specific time frame.

Energy Information Administration

A U.S. Government agency responsible for collecting, analyzing, and distributing energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment.

Energy Storage Problem

Refers to the challenge of capturing energy produced at one time for use at a later time, important for renewable energy sources that don't produce power continuously.