A Firm Is Considering a Project with an Annual Cash

question 49

Multiple Choice

A firm is considering a project with an annual cash flow of £200,000. The project would have a 7-year life, and the company uses a discount rate of 10 per cent. Ignoring income taxes, what is the maximum amount the company could invest in the project and have the project still be acceptable?

• A)£718,200
• B)£1,400,000
• C)£973,600
• D)£200,000

---

Definitions:

Synonymous Substitution Rate

The rate at which point mutations occur in a DNA sequence that do not alter the encoded amino acid due to the redundancy of the genetic code.

Purifying Selection

Removes deleterious alleles from a population. It is a common form of stabilizing selection.

Molecular Clock Estimates

Techniques that use the rate of molecular change to deduce the time in geological history when two species or other taxa diverged.