Which of the Following Statements Is Most Likely Correct for a Project

question 105

Multiple Choice

Which of the following statements is most likely correct for a project costing $50,000 and returning $14,000 per year for five years?

• A)NPV = $3,071.01
• B)NPV = $20,000
• C)IRR = 2.8 percent
• D)IRR is greater than 10 percent

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Definitions:

Mathematical Expression

A combination of numbers, symbols, and operators (such as +, -, *, /) that represents a quantitative relationship or value.

Present Value Calculation

A formula used to determine the current value of a sum of money to be received in the future, accounting for a specific interest rate.

Exponentiation

A mathematical operation involving the raising of one number to the power of another.

Variable Substitution

In mathematics, this involves replacing variables with other variables or values to simplify expressions or solve equations.