What Is the NPV for the Following Project Cash Flows

question 72

Multiple Choice

What is the NPV for the following project cash flows at a discount rate of 15 percent? CF0 = ($1,000) , CF1 = $700, CF2 = $700.

• A)($308.70)
• B)($138.00)
• C)$138.00
• D)$308.70

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Definitions:

Revenue

The total amount of money received by a company for goods sold or services provided during a certain time period.

Break-Even Point

The break-even point is the point at which total costs and total revenues are equal, meaning there is no net loss or gain.

Variable Costs

Costs that vary depending on the level of production or sales.

Fixed Costs

Expenses that remain constant regardless of production or sales volume, including rent, salaries, and insurance costs.