Use the Information for the Question(s)below

question 89

Multiple Choice

Use the information for the question(s) below.
Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy,with each outcome being equally likely.The initial investment required for the project is $80,000,and the project's cost of capital is 15%.The risk-free interest rate is 5%.
-The NPV for this project is closest to:

• A)$6250.
• B)$14,100.
• C)$10,000.
• D)$18,600.

---

Definitions:

Social Stratification

A system by which a society ranks categories of people in a hierarchy, based on factors like wealth, income, race, education, and power.

Social Class

A division of a society based on social and economic status.

Social Strata

Layers within a society, formed based on various criteria such as wealth, occupation, and education, which define a person's social standing or class.

Pecking Order

A social hierarchy among a group, where individuals or entities are ranked relative to each other.