What Is the Net Present Value of a Project with the Following

question 97

Multiple Choice

What is the net present value of a project with the following cash flows and a required return of 12%?
$\begin{array}{|l|l|}\hline \text { Year } & \text { Cash Flow } \\\hline 0 & -£ 28,900 \\\hline 1 & £ 12,450 \\\hline 2 & £ 19,630 \\\hline 3 & £ 2,750\\\hline\end{array}$

• A)-£287.22
• B)-£177.62
• C)£177.62
• D)£204.36
• E)£287.22

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Definitions:

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Devil's Advocate

A position taken by someone to provoke debate or challenge the prevailing viewpoint for the sake of argument or analysis.

Critical

In context, refers to something of great importance or a situation/condition being especially significant or perilous.

Discourage

To dissuade or attempt to dissuade someone from doing something by instilling doubt or fear.