What Is the Net Present Value of a Project That

question 40

Multiple Choice

What is the net present value of a project that requires a net investment of $76,000 and produces net cash flows of $22,000 per year for 7 years? Assume the cost of capital is 15 percent.

• A)$91,520
• B)$15,520
• C)$78,000
• D)$167,474

---

Definitions:

Erosion Promontory

A high point of land that extends into a body of water, formed from the resistance of its materials to weathering and erosion.

Seafloor Spreading

The process by which new oceanic crust is created at mid-ocean ridges and gradually moves away from the ridge, contributing to continental drift.

Sea Level Rise

The increase in the global average level of the oceans, attributed primarily to climate change via melting ice and thermal expansion of seawater.

Karst Topography

Topography characterized by sinkholes, caves, limestone pillars, poorly organized drainage patterns, and disappearing streams; generally formed from the dissolution of limestone.