A Project Will Cost $50,000 to Initiate and Will Generate

question 44

Multiple Choice

A project will cost $50,000 to initiate and will generate real cash flows of $40,000 in each of the next two years.The nominal discount rate has been estimated to be 10% per year.Expected inflation is 4% over the next two years.What is the NPV of the project?

• A)$19,421
• B)$21,574
• C)$23,574
• D)$25,497

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