If an Investment Requires Payment of $5,000 Now and Promises

question 78

Multiple Choice

If an investment requires payment of $5,000 now and promises to return a single payout of $15,000 one year from now, the net present value of the investment at an interest rate of 10% is approximately

• A)$3,636.
• B)$8,636.
• C)$10,000.
• D)$13,636.

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Definitions:

Slack

The amount of time that a project task can be delayed without causing a delay to subsequent tasks or the whole project.

Cost Structure

The composition of fixed and variable costs that a company incurs in the process of producing goods or services.

Minimum Quantities

The smallest amount or number of items that can be produced, ordered, or maintained to ensure efficiency.

Profit Margins

A financial metric that measures the percentage of profit a company retains from its total revenue after subtracting the cost of goods sold and other expenses.