Calculate the Net Present Value for a Project with the Following

question 28

Multiple Choice

Calculate the Net Present Value for a project with the following cash flows: Year 0: ($5,000) Year 1: $10,000 Year 2: $10,000 Year3: ($2,000) .The discount rate is 5%.

• A) $19,209.75
• B) $14,209.75
• C) $18,840.25
• D) $23,840.25
• E) $12,350.00

---

Definitions:

Collection Period

The average number of days it takes a company to collect payments after a sale has been made.

Aging Schedule

A table or report that shows the amounts of accounts receivable broken down into categories by the length of time they have been outstanding.

Credit Policy

Guidelines that a company follows to determine credit terms for its customers, including payment deadlines, interest rates, and criteria for extending credit.

Marketable Securities

Marketable securities are liquid financial instruments that can be quickly converted into cash at market value, such as stocks, bonds, or treasury bills.