A Project Manager Is Using the Net Present Value Method

question 72

Multiple Choice

A project manager is using the net present value method to make the final decision on which project to undertake.The company has a 12% required rate of return and expects a 3% rate of inflation for the following four years.What is the NPV of a project that has cash flows as shown in the table? $$\begin{array} { | l | l | } \hline \text { Year } & \text { Cash Flow } \\\hline 0 & - \$ 250,000 \\\hline 1 & \$ 50,000 \\\hline 2 & \$ 60,000 \\\hline 3& \$ 70,000 \\\hline 4 & \$ 80,000 \\\hline\end{array}$$

• A)-$9,762
• B)-$56,859
• C)-$69,387
• D)-$98,780

---

Definitions:

Internal Attributions

The process of inferring that a person's behavior is due to their personality, disposition, or beliefs rather than external factors.

Statistical Regression

A phenomenon where extreme scores or outcomes tend to move towards the average over time.

Heuristic Processing

A method of problem-solving, learning, or discovery that employs a practical approach based on experience, immediate context, or a rule of thumb rather than explicit criteria.

Desired Outcomes

The specific results or consequences that an individual or group aims to achieve through their actions or decisions.