If a Project Has an Initial Cost of $50,000

question 74

Multiple Choice

If a project has an initial cost of $50,000.00 and no other costs throughout the life of the project, what is the PI for the project given the NPV is $3,620.00?

• A)1.150
• B)1.072
• C)0.920
• D)Cannot be determined

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Definitions:

Underwriting Provision

A term in an agreement that outlines the responsibilities and risks taken by an underwriter in facilitating a public offering of securities.

Private Placements

A method of raising capital through the sale of securities to a small number of selected investors rather than through a public offering.

Rights Offering

A financial offering in which a company gives existing shareholders the right to buy additional shares at a discounted price before offering it to the public.

Underwriting Provision

A clause in financial agreements, especially in insurance and securities, where an underwriter commits to buy and resell a specific amount of securities or assumes financial risk for a fee.