A Capital Investment Project Requires an Investment of $100,000 and Has

question 15

Multiple Choice

A capital investment project requires an investment of $100,000 and has an expected life of four years. Annual cash flows at the end of each year are expected to be as follows: $$\begin{array} { c c } \text { Year } & \text { Amount } \\1 & \$ 40,000 \\2 & \$ 48,000 \\3 & \$ 76,000 \\4 & \$ 56,000\end{array}$$ Ignoring income taxes, the net present value of the project using a 8 percent discount rate is

• A)$20,320
• B)$49,680
• C)($49,680)
• D)($20,320)

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Definitions:

Universal Generalization

A conclusion drawn about all members of a group based on observations or evidence from only some members of the group.

Existential Instantiation

A rule of inference used in logic to deduce that if there exists an element in a domain with a certain property, one can infer the existence of a specific example of that element.

Universal Instantiation

A logical rule that allows for the conclusion that what is true of all members of a class is true for any specific member.

Quantifier Negation

The logical operation of negating the quantifiers within a statement, which often changes the scope or meaning of the statement.