What Is the Net Present Value of a Project That

question 33

Multiple Choice

What is the net present value of a project that has an initial cost of $40,000 and produces cash inflows of $ 8,500 a year for 10 years if the discount rate is 13 percent?

• A)$ 4,678.09
• B)$ 6,500.00
• C)$ 6,123.07
• D)$ 7,189.34
• E)$ 6,712.03

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Definitions:

Perfect Competitor

A theoretical market scenario where many firms sell identical products, where no single buyer or seller can influence the market price.

Long Run

A period in economics where all factors of production and costs are variable, and firms can enter or exit the market.

Perfect Competitor

A theoretical market structure where numerous small firms produce identical products, allowing no single firm to affect the market price.

Long Run

In economics, this term describes a period in which all factors of production and costs are variable, allowing full adjustment to any change.