(Ignore Income Taxes in This Problem

question 42

Multiple Choice

(Ignore income taxes in this problem.) Parks Corporation is considering an investment proposal in which a working capital investment of $10,000 would be required.The investment would provide cash inflows of $2,000 per year for six years.The working capital would be released for use elsewhere when the project is completed.If the company's discount rate is 10%,the investment's net present value is closest to:

• A) $1,290
• B) $(1,290)
• C) $2,000
• D) $4,350

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