An Investment Cost $10,000 with Expected Cash Flows of $3,000

question 93

Multiple Choice

An investment cost $10,000 with expected cash flows of $3,000 for 5 years. The discount rate is 15.2382%. The NPV is ______ and the IRR is ______ for the project.

• A) $0; 15.2382%
• B) $3.33; 27.2242%
• C) $5,000; 0%
• D) Can not answer without one or the other value as input.
• E) None of these.

---

Definitions:

Creative Destruction

A concept in economic theory that refers to the process by which new innovation leads to the demise of existing structures and creates new opportunities.

Dominant Firms

Firms that have a major share of the market sales in a particular industry, giving them the power to influence the market's total output and price levels.

New Products

Items that have been recently introduced to the market, offering innovative solutions or improvements over existing products.

Interest-Rate Cost-Of-Funds

Represents the interest rate that banks or other financial institutions pay for the funds that they use in their operations, including deposits and loans from other institutions.