A Project Has an Initial Investment of $150 A) 50, -100, +400
B) -50, +300, +500
C) -100

question 27

Multiple Choice

A project has an initial investment of $150. You have come up with the following estimates of revenues and costs. Calculate the NPV assuming that cash flow and perpetuities. (No taxes.) (Cost of capital = 10%)
$$\begin{array} { l c c c } & \text { Pessimistic } & \text { Most Likely } & \text { Optimistic } \\\text { Total revenues } & + 30 & + 50 & 65 \\\text { Total costs } & - 25 & - 20 & - 15\end{array}$$

• A) 50, -100, +400
• B) -50, +300, +500
• C) -100, +150, +350
• D) None of the above

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Definitions:

Stepwise Regression

A method of regression analysis that involves automatic selection of independent variables to use in a model based on certain criteria.

Backward Elimination

A stepwise regression technique where all predictors are included in the model initially, and then the least significant predictor is removed step-by-step until the best model is identified.

Forward Selection

A stepwise approach in model selection where variables are added one by one based on their statistical significance.

Best-subsets Regression

A statistical method that involves analyzing all possible combinations of variables to identify the model that best fits the data.