Suppose You Have an Opportunity to Invest in a Project

question 8

Multiple Choice

Suppose you have an opportunity to invest in a project, which requires an after-tax incremental cash outlay of $25,000 today.The project is expected to generate after-tax cash flows of $7,500 per year for the next six years.What is the project's NPV if the appropriate discount rate is 15%?

• A)$141
• B)$3,384
• C)$7,642
• D)$10,884

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