A Five-Year Project Requires an Additional Commitment of $100,000 in Net

question 26

Multiple Choice

A five-year project requires an additional commitment of $100,000 in net working capital.What is the present value opportunity cost associated with this investment?

• A)$100,000
• B)the present value of $100,000, discounted at the firm's cost of capital
• C)the value of $100,000, netted against the discounted present value of the $100,000 of working capital returned at the end of the project
• D)no opportunity cost is involved

---

Definitions:

Services

Intangible products provided to consumers, which could include education, healthcare, and entertainment, among others.

Exchange Rate

The rate at which one currency can be exchanged for another.

Country's Currency

The legal tender or medium of exchange that is issued by a country and used for financial transactions within its borders.

Indirect Exporting

A method of exporting goods through intermediaries, rather than directly to the foreign market.