A Project Requires a Net Investment of $450,000

question 4

Multiple Choice

A project requires a net investment of $450,000. It has a profitability index of 1.25 based on the firm's 12% cost of capital. Determine the net present value of the project.

• A) $112,500
• B) $562,500
• C) $1,012,500
• D) $140,625

---

Definitions:

Global Strategy

A business approach that considers the world as a single market, focusing on developing standardized products or services to achieve economies of scale.

Financialized

A term describing how financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes.

Financial Activities

These involve transactions related to the management, investment, transfer, and expenditure of money by individuals, businesses, and governments.

Lending

The act of providing funds to another party with the expectation that the funds will be repaid, often with interest, at a later date.