If an Investment Costing $2000 Is Expected to Generate Real

question 62

Multiple Choice

If an investment costing $2000 is expected to generate real cash flows of $900 p.a.for three years,prices are expected to increase at a rate of 10% p.a. ,and the nominal cost of capital is 15%,what is the net present value of the investment?

• A)$520.59
• B)$740.79
• C)$471.97
• D)$389.79

---

Definitions:

Peerless Ship

Referencing a specific case in contract law regarding the sale of goods when there is a misunderstanding about which specific goods are being sold.

Unilateral Mistake

An error made by one party in the understanding or interpretation of facts or law related to a contract, which may not necessarily void the contract.

Material Fact

Any fact that is significant or essential to the subject matter of a contract or legal proceeding, which if known, might have altered the decision of a party.

Innocent Misrepresentation

A false statement made without knowledge of its falsity, leading to a contract or agreement that can be voided.