Dickson Co A) $25015
B) $277

question 18

Multiple Choice

Dickson Co.is considering a project that has the following cash flow and cost of capital (r) data.What is the project's NPV? Note that a project's expected NPV can be negative, in which case it will be rejected. $$\begin{array} { l c c c c c c } \text { r: } & 12.00 \% & & & & \\\text { Year } & 0 & 1 & 2 & 3 & 4 & 5 \\\hline \text { Cash flows } & - \$ 1,100 & \$ 400 & \$ 390 & \$ 380 & \$ 370 & \$ 360\end{array}$$

• A) $250.15
• B) $277.94
• C) $305.73
• D) $336.31
• E) $369.94

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Definitions:

Saving

The portion of income not spent on consumption or taxes, typically put aside for future use or investment.

Loanable Funds

Financial resources available for borrowing, consisting of the savings of individuals, businesses, and the government.

Saving

The process of setting aside a portion of current income for future use or for investment.

Investment

The distribution of assets, typically financial, with the aim of earning revenue or gains.