A 25- Year Project Has a Cost of $1,500,000 and Has

question 304

Multiple Choice

A 25- year project has a cost of $1,500,000 and has annual cash flows of $400,000 in years 1-15, and $200,000 in years 16-25. The company's required rate is 14%. Given this information, calculate
The NPV of the project.

• A) $0.50 million
• B) $0.70 million
• C) $0.87 million
• D) $1.00 million
• E) $1.10 million

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Definitions:

B2C

Business-to-Consumer, a commercial transaction model where businesses sell products or services directly to the end-users or consumers.

C2B

Consumer-to-Business, a business model where consumers create value or products that businesses purchase.

B2B

Business-to-Business, a model that involves transactions between two firms rather than between a firm and individual consumers.

Ordering Cost

The expenses incurred in placing and receiving orders for materials or products, including paperwork, communication, and transportation costs.