Given the Following Cash Flow for Project A: C0 =

question 29

Multiple Choice

Given the following cash flow for project A: C0 = -3,000, C1 = +500, C2 = +1,500 and C3
= +5,000, calculate the NPV of the project using a 15% discount rate.

• A) $5,000
• B) $2,352
• C) $3,201
• D) $1,857

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Definitions:

Firms

Business organizations or entities engaged in commercial, industrial, or professional activities with the goal of generating profits.

Resource Market

Markets where resources (or factors of production) like labor, capital, and raw materials are bought and sold.

Consumption Expenditures

The total amount spent by consumers on goods and services within a specified period.

Households

Individuals or groups living together who make joint decisions on consumption and resource allocation, forming the basic consuming unit in an economy.