If the Present Value of a Cash Flow Generated by an Initial

question 93

Multiple Choice

If the present value of a cash flow generated by an initial investment of $200,000 is
$250,000,
What is the NPV of the project?

• A) $250,000
• B) $50,000
• C) $200,000
• D) None of the above

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Definitions:

Valuation

The process of determining the current worth of an asset or a company.

Yield

The annual percentage yield from an investment, like dividends or interest earned, calculated based on the cost of the investment, its present market price, or its nominal value.

Future Cash Flows

Estimated streams of future financial income or expenditure, related to investments, projects, or business operations.

Rate of Return

A measure of the profitability of an investment, expressed as a percentage of the original investment.