A Firm Is Evaluating a Proposal Which Has an Initial

question 65

Multiple Choice

A firm is evaluating a proposal which has an initial investment of $50,000 and has cash flows of $15,000 per year for five years.If the firm's required return or cost of capital is 10%, the NPV of the project is:

• A)$5,000
• B)$6,862
• C)-$5,000
• D)-$6,862
• E)none of the above

---

Definitions:

Thomas Gainsborough

An 18th-century British painter known for his landscape paintings and portraiture.

Mrs. Richard Brinsley Sheridan

Refers to Elizabeth Ann Linley Sheridan, an 18th-century English soprano, noted for her beauty and the subject of several portraits, married to playwright Richard Brinsley Sheridan.

The Swing

A famous Rococo painting by Jean-Honoré Fragonard, depicting a young woman swinging while being watched by her lover, embodying the playful and sensual style of the period.

Rococo

An 18th-century artistic movement and style, originating in France, characterized by elaborate ornamentation, asymmetrical values, pastel color palette, and themes of love, nature, and light-heartedness.