A Project Costs $30,000 and Is Expected to Return $36,000

question 29

Multiple Choice

A project costs $30,000 and is expected to return $36,000 next year. One-year taxable bonds of similar risk are yielding 10% while similar-risk munis are yielding 8%. Your marginal tax rate
Is 30%. What is the NPV of this project? Round your answer to the nearest dollar

• A)$1,091
• B)$2,386
• C)$1,963
• D)$1,667

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Definitions:

Long-Term Memory Loss

A condition that affects the ability to recall events, information, or experiences from the distant past.

Paranoia

A mental condition characterized by delusions of persecution, unwarranted jealousy, or exaggerated self-importance, often disconnected from reality.

Credit Score

A numerical expression based on a level analysis of a person's credit files, representing the creditworthiness of an individual.

Interest Rate

The percentage of a sum of money charged by a lender to a borrower for the use of the money.