A Company Has the Following Net Cash Inflows

question 65

Multiple Choice

A company has the following net cash inflows. Today -$7000, Year 1 -$15 000, Year 2 -$9000, Year 3 + $12 000, Year 4 -$3000, Year 5 + $19 000. Compute the net present value if the required rate of return is 7.22% compounded annually.

• A) -$4709.89
• B) -$3000.00
• C) -$7009.89
• D) -$7409.89
• E) $4709.89

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Definitions:

Wool Coats

Garments made from the natural fibers of sheep, designed to provide warmth.

Harvest

The process of gathering mature crops from the fields, marking the culmination of a growing season and the initiation of the post-harvest phase.

Peanut Crop

The agricultural yield or production of peanuts in a given season or area.

Complementary Good

A product that is consumed along with another product, with the demand for one good increasing when the price of its complement decreases.