The Cash Flow (In Millions) of a Business at Time

question 103

Multiple Choice

The cash flow (in millions) of a business at time t (in months) is modeled by . What will the cash flow be after 3 years (round to the nearest ten-thousand) ?

• A) $4.05 million
• B) $20.27 million
• C) $6.29 million
• D) $3.68 million
• E) $3.54 million

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Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present values, reflecting the opportunity cost of capital.

Project Profitability Index

A measure used to evaluate the attractiveness of an investment or project, calculated as the present value of future cash flows divided by the initial investment cost.

Initial Investments

The upfront money used to fund a new project, purchase a company, or make an investment, typically associated with starting costs.

Investment Projects

Initiatives or plans that require capital investment to generate financial returns or achieve business objectives over time.