Figure 14-6.Present Value of $1

question 6

Multiple Choice

Figure 14-6.Present value of $1
Present value of an Annuity of $1

-Refer to Figure 14-6. Roman Knoze is considering two investments. Each will cost $20,000 initially. Project 1 will return annual cash flows of $10,000 in each of three years. Project 2 will return $5,000 in year 1, $10,000 in year 2, and $15,000 in year 3. Roman requires a minimum rate of return of 10%. What is the net present value of Project 2?

• A) $5,670
• B) $20,000
• C) $2,530
• D) $24,070
• E) $4,070

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Definitions:

Neural Plate

An embryonic structure that develops into the nervous system, including the brain and spinal cord, through a process known as neurulation.

Neural Groove

An early formation in embryonic development that eventually becomes the central nervous system.

Neural Fold

Elevated edges of the neural plate in the developing embryo, which fold over to form the neural tube, the precursor to the central nervous system.

Telencephalon

The advanced portion of the brain that envelopes the forebrain and is responsible for complex cognitive functions.