What Is the NPV for the Following Project Cash Flows

question 101

Multiple Choice

What is the NPV for the following project cash flows at a discount rate of 15 percent? CF₀ = ($1,000) ,CF₁ = $700,CF₂ = $700.

• A) ($308.70)
• B) ($138.00)
• C) $138.00
• D) $308.70

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Definitions:

Income

Refers to the money received, especially on a regular basis, for work or through investments.

Normal Goods

Goods for which demand increases as consumer income rises, and falls when consumer income decreases, opposite to inferior goods.

Inferior Goods

Goods whose demand decreases as the income of consumers increases, in contrast to normal goods.

Income

Income generated regularly from employment or investments.