A 50- Year Project Has a Cost of $500,000 and Has

question 341

Multiple Choice

A 50- year project has a cost of $500,000 and has annual cash flows of $100,000 in years 1-25, and $200,000 in years 26-50. The company's required rate is 8%. Given this information, calculate the
NPV of the project.

• A) $879,219
• B) $779,219
• C) $679,219
• D) $579,219
• E) $479,219

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Definitions:

Correlation Coefficient

A quantitative indicator showing both the magnitude and direction of a linear association between a pair of variables.

Linear Relationship

A type of association where changes in an independent variable result in proportional changes in a dependent variable, represented by a straight line in graph form.

Covariance

A measure that determines the degree to which two variables change together.

Correlation Coefficient

A statistical measure that describes the size and direction of a relationship between two or more variables.