Use the Following Information to Answer the Question(s)below

question 77

Multiple Choice

Use the following information to answer the question(s) below.
You are considering investing in a start-up project at a cost of $100,000.You expect the project to return $500,000 to you in seven years.Given the risk of this project,your cost of capital is 20%.
-The NPV for this project is closest to:

• A)$29,200.
• B)$39,500.
• C)$129,200.
• D)$139,500.

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Definitions:

Stable Prices

A situation in the economy where prices of goods and services do not fluctuate significantly in the short term, contributing to economic stability.

Multiplier Effect

The additional shifts in aggregate demand that result when expansionary fiscal policy increases income and thereby increases consumer spending.

Government Expenditures

The total amount spent by the government for its operations, programs, and services.

Monetary Policy

The process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure economic stability and growth.