What Is the Net Present Value (NPV)of a Project If

question 15

Multiple Choice

What is the net present value (NPV) of a project if the present value of cash inflow is $10,000 and the present value of cash outflows is $5,000?

• A) $2,000
• B) $5,000
• C) $10,000
• D) $15,000

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Definitions:

Required Return

The minimum return an investor expects to achieve by investing in a particular asset, considering its risk.

Annual Dividend

The yearly sum of money paid out to shareholders, typically derived from a company's profits.

Rate of Return

The earnings or losses realized from an investment for a certain period, presented as a proportion of the investment's original expenditure.

First Dividends

The initial distribution of earnings declared by a company to its shareholders.