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A Project Is Expected to Create Operating Cash Flows of €22,500

question 1

Multiple Choice

A project is expected to create operating cash flows of €22,500 a year for three years.The initial cost of the non-current assets is €50,000.These assets will be worthless at the end of the project.An additional €3,000 of net working capital will be required throughout the life of the project.What is the project's net present value if the required rate of return is 10%?

Definitions:

Conformity

The tendency of individuals to align their attitudes, beliefs, and behaviors with those of a group or society.

Informational Social Influence

The influence of others that leads to conformity because of a desire to be correct and understand the correct behavior or opinion.

Normative Social Influence

Involves the impact of social norms and the desire to be accepted by others on an individual's behavior.

Group Polarization

The phenomenon where the attitude of a group becomes more extreme than the initial inclination of its members after discussing a topic.