John Is Considering a Project with Cash Inflows of $1,750

question 100

Multiple Choice

John is considering a project with cash inflows of $1,750, $1,850, $2,000, and $2,550 over the next four years, respectively.The relevant discount rate is 14 percent.What is the net present value of this project if it the start-up cost is $5,000?

• A)$818.35
• B)$947.56
• C)-$600.00
• D)$693.61
• E)$379.75

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Definitions:

Monopolistic Firm

A monopolistic firm is a company that has significant market power to set prices or output levels, often because it is the only supplier of a product or service.

Marginal Revenue Curve

A graphical representation showing how marginal revenue varies as output level changes.

Demand Curve

A graph representing the quantity of a good that consumers are willing and able to purchase at various prices.

Non-discriminating Monopolist

A monopolist who charges a single price for all units of output sold, unlike price-discriminating monopolists who charge different prices.