A Given Project Requires a $28,500 Investment and Is Expected $$\begin{array} { c c c } i = 10\% & i = 10 \% & i = 10\% \\n = 1 & n = 2 & n = 3 \\.9091 & .8264 & .7513\end{array}$$

question 8

Multiple Choice

A given project requires a $28,500 investment and is expected to generate end-of-period annual cash inflows of $12,000 for each of three years. Assuming a discount rate of 10%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below: $$\begin{array} { c c c } i = 10\% & i = 10 \% & i = 10\% \\n = 1 & n = 2 & n = 3 \\.9091 & .8264 & .7513\end{array}$$

• A) $0.00
• B) $2,668.00
• C) ($7,461.00)
• D) $1,341.60
• E) $29,841.60

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Definitions:

Transactions

Acts of buying or selling goods, services, or financial instruments.

Invests

The act of allocating resources, usually money, in the expectation of generating an income or profit.

Note Payable

A written promise to pay a specified amount of money, along with interest, by a certain date.

Cash Payment

A transaction in which money is paid out or disbursed immediately in cash.