DiplomatCom Is Considering a Project That Has an Up-Front Cost

question 3

Multiple Choice

Diplomat.com is considering a project that has an up-front cost of $3 million and is expected to produce a cash flow of $500,000 at the end of each of the next 5 years. The project's cost of capital is 10%.
-Based on the above data, what is the project's net present value?

• A) -$1,312,456
• B) -$1,104,607
• C) -$875,203
• D) $105,999
• E) $321,788

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Definitions:

Bronchiolitis

An infection of the small airways (bronchioles) in the lungs, mostly affecting infants and young children, causing cough and wheezing.

Mist Tent

A type of medical equipment that creates a fine mist of aerosolized medication or moist air for a patient to breathe in, often used for respiratory conditions.

Noninvasive Oxygen Monitoring

A method to monitor oxygen saturation in the blood without the need for a blood sample, typically using a device called a pulse oximeter.

Peak Expiratory Flowmeter

A device used to measure the highest speed of exhalation from the lungs, aiding in asthma management.