A Project Requires a Net Investment of $450,000

question 9

Multiple Choice

A project requires a net investment of $450,000.It has a profitability index of 1.25 based on the firm's 12 percent cost of capital.Determine the net present value of the project.

• A)$112,500
• B)$562,500
• C)$1,012,500
• D)$140,625

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Definitions:

Income

The amount of money received on a regular basis from work, property, business, or as financial support.

Positively Correlated

A relationship between two variables in which they both move in the same direction, meaning that as one variable increases, the other also increases.

Manipulates Factor

In experimental design, the variable that is changed or controlled by the researcher to observe its effect on the dependent variable.

Research Design

The framework or plan for a study used as a guide in collecting and analyzing data.