Given the Following Cash Flow for Project A: C0 =

question 29

Multiple Choice

Given the following cash flow for project A: C0 = -3,000, C1 = +500, C2 = +1,500 and C3
= +5,000, calculate the NPV of the project using a 15% discount rate.

• A) $5,000
• B) $2,352
• C) $3,201
• D) $1,857

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Definitions:

Selling Price

The price at which goods or services are offered for sale to customers.

Cost

The value of the expenses incurred in the production or acquisition of a good or service, including materials, labor, and overheads.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in net income or loss.

Net Income

The concluding profit margin of a company after deducting all operational expenditures and taxes from its income.