Suppose a Project Requires an Initial Investment of $1,000 and It

question 3

Multiple Choice

Suppose a project requires an initial investment of $1,000 and it will yield $1,050 one year later.The NPV of the project is:

• A)Equal to $50
• B)less than 0 if the discount rate is less than 5 percent
• C)Zero if the discount rate is equal to 5 percent
• D)Positive if the discount rate is greater than 5 percent

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Definitions:

AFL

The American Federation of Labor, a national federation of labor unions in the United States founded in 1886, focused on fair labor conditions.

American Union Against Militarism

An organization founded in the early 20th century aiming to promote peace and resist militaristic policies and practices.

House-Grey Memorandum

Unofficial diplomatic communication in 1916 between the United States and Great Britain outlining a proposal for joint mediation of World War I by the United States, contingent upon support from both the Allies and the Central Powers.