The Following Data Pertain to an Investment Proposal Ignoring Income Taxes, How Much Is the Net Present Value

question 124

Multiple Choice

The following data pertain to an investment proposal: $$\begin{array} { l r } \text { Required investment } & \$ 75,000 \\\text { Annual cost savings } & \$ 18,000 \\\text { Projected life of investment } & 8 \text { years } \\\text { Projected salvage value } & \$ 4,000 \\\text { Required rate of return } & 16 \%\end{array}$$ Ignoring income taxes, how much is the net present value of the proposed investment?

• A) $13,527
• B) $3,185
• C) $14,747
• D) $4,405

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Definitions:

Observations

Data points or items recorded during an experiment or survey; these are the raw data collected from the experiment or observational study.

F Value

A ratio used in statistical analysis to determine the significance of group differences by comparing the variance between groups with the variance within groups.

Multiple Regression Analysis

A statistical technique that uses multiple independent variables to predict the outcome of a dependent variable.

Relationship Among Variables

This describes how variables or data features interact with each other, indicating patterns, trends, or causal connections.