A Project Costs $91,000 Today and Is Expected to Generate

question 34

Multiple Choice

A project costs $91,000 today and is expected to generate cash flows of $11,000 per year for the next 20 years. The firm has a cost of capital of 8 percent. Should this project be accepted, and why?

• A)Yes, the project should be accepted since it has a NPV = $15,391.23.
• B)Yes, the project should be accepted since it has a NPV = $13,610.89.
• C)Yes, the project should be accepted since it has a NPV = $16,999.62.
• D)None of these answers are correct.

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Definitions:

Physical Arousal

The physiological response of the body to external stimuli or internal thoughts, leading to increased heart rate, breathing, and energy.

Inner Awareness

The conscious experience of one's own thoughts, feelings, and state of being.

Electrolyte Imbalance

A condition where the levels of electrolytes in the body are either too high or too low, affecting various bodily functions.

Wrestler

An athlete who participates in wrestling, a competitive sport involving grappling and physical strength.