A Project Requires an Investment of $900 Today

question 44

Multiple Choice

A project requires an investment of $900 today. It has sales of $1,100 per year forever. Costs will be $600 the first year and increase by 20% per year. Ignoring taxes calculate the NPV of the project at 12% discount rate.

• A) $65.00
• B) $57.51
• C) $100.00
• D) Cannot be calculated as g > r

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Definitions:

Autonomy

The capacity to make an informed, uncoerced decision or the right of individuals to direct their own lives.

Competence

The ability and skill to efficiently perform a task or job, often measured against a standard or benchmark.

Intrinsic Motivation

The drive to engage in an activity for its own sake, without the influence of external rewards or pressures.

Extrinsic Motivation

Motivation driven by external rewards such as money, fame, grades, or praise.