An Investment of $1

question 25

Multiple Choice

An investment of $1.5 million is expected to generate cash flows of $600 000 p.a. ,at constant prices,over the next three years.Given that the nominal required rate of return is 12% p.a.and that prices are expected to increase at the rate of 5% p.a. ,the project's net present value is:

• A)($58 901)
• B)$84 229
• C)(187 031)
• D)$13 154