A Project Will Produce Cash Inflows of $5,400 a Year

question 79

Multiple Choice

A project will produce cash inflows of $5,400 a year for 3 years with a final cash inflow of $2,400 in Year 4. The project's initial cost is $13,400. What is the net present value if the required rate of return is 14.2 percent?

• A) −$311.02
• B) $505.92
• C) −$165.11
• D) $218.98
• E) $668.02

Comprehend the impact of car culture on American society, particularly in Los Angeles, during the 1950s.

Recognize the role of progressive income tax policy in reducing income inequality between 1950 and 1973.

Grasp the environmental and economic implications of agricultural practices in the United States.

Appreciate the cultural and political significance of the "Kitchen Debate" between Richard Nixon and Nikita Khrushchev.

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Definitions:

Cost of Capital

The cost of funds used for financing a business, typically considered as the weighted average of both debt and equity costs.

Investment Opportunities

Options available to investors looking to allocate resources in a way that generates a financial return.

Mutually Exclusive

Decisions or events that cannot occur at the same time, implying that the selection of one precludes the selection of another.

Pay Back

The time period required for an investment to generate cash flow sufficient to recover its initial cost.