Assume a 5-Year Project Has a Base-Case NPV of $213,000

question 61

Multiple Choice

Assume a 5-year project has a base-case NPV of $213,000, a tax rate of 34%, and a cost of capital of 14%. What will be the worst-case NPV if the annual cash flows are reduced in that scenario by $35,000 for each of the 5 years?

• A) -$92,842.17
• B) -$120,157.83
• C) $92,842.17
• D)$120,157.83

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Definitions:

Calculated Control

In software, a control that displays the result of a mathematical expression which uses data from other fields or controls.

Equal Sign

A symbol (=) used in mathematics to indicate that two expressions are equal in value.

Link Child Fields

The process of associating fields in a child table with fields in a parent table to maintain data integrity in a relational database.

Link Master Fields

In database applications, it relates to the action of creating relationships between master (primary) and detail (secondary) fields to synchronize data.