A Project Has an NPV = 0 and the Initial

question 26

Multiple Choice

A project has an NPV = 0 and the initial investment is $360,000. If the discount rate is 12%, compute the annual cash inflows, if the project's life is 4 years.

• A) $133,080
• B) $118,538
• C) $82,267
• D) $123,682

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Definitions:

Acre-Foot

A unit of volume used in the United States to measure large-scale water resources, such as in reservoirs or irrigation, equal to the volume of water required to cover one acre of land one foot deep.

Football Fields

Standard units of measurement representing the playing area for American football, approximately 360 feet in length and 160 feet in width.

Gallons

Gallons are a unit of volume used primarily in the United States to measure liquids and gases, equivalent to 3.785 liters.

Infiltration Capacity

The maximum rate at which soil can absorb water, affected by factors such as soil composition, moisture content, and vegetation cover.