A Project with an Initial Cost of $314,000 Will Generate

question 22

Multiple Choice

A project with an initial cost of $314,000 will generate no returns in the first two years of operations, and operating cash flows of $150,000 per year in Years 3, 4, and 5. The required rate of return is 7%. To which amount is the net present value of the project closest?

• A) $29,830
• B) $343,830
• C) $61,900
• D) $393,645

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Definitions:

Crista Galli

A vertical projection of the ethmoid bone in the skull, serving as the point of attachment for membranes dividing the nasal cavity.

Supraorbital Foramen

An opening or notch in the frontal bone of the skull, above the eye orbit, through which the supraorbital nerve and vessels pass.

Infraorbital Foramen

An opening located below the orbit (eye socket) on the skull through which nerves and blood vessels pass.

Foramen Magnum

The large opening at the base of the skull through which the spinal cord passes to connect with the brain.