You Are Considering a Project with an Initial Outlay of $12

question 153

Multiple Choice

You are considering a project with an initial outlay of $12 million followed by 4 years of $4 million.   What is the NPV if the discount rate is 8%?

• A)$6,204,400
• B)​$1,248,400
• C)$13,248,400
• D)$ 18,204,400

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Definitions:

Shareholder Vote

An act where individuals or entities holding shares in a corporation participate in deciding on corporate matters through voting.

Consolidation

The process of combining multiple debts, loans, or businesses into a single new loan or corporate entity.

Legal Existence

A term indicating that an entity is recognized under the law as having legal rights and obligations.

Hostile Tender Offer

An attempt to acquire a company against the wishes of its management and board by directly offering to buy the shares from the shareholders.