A Proposed Project Requires an Initial Cash Outlay of $749,000

question 2

Multiple Choice

A proposed project requires an initial cash outlay of $749,000 for equipment and an additional cash outlay of $48,500 in year one to cover operating costs. During years 2 through 4, the project will generate cash inflows of $354,000 a year. What is the net present value of this project at a discount rate of 16 percent?

• A) -$105,427
• B) -$41,209
• C) $67,333
• D) $128,612
• E) $239,602

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