What Is the NPV for a Project Whose Cost of Capital

question 129

Multiple Choice

What is the NPV for a project whose cost of capital is 15 percent and initial after-tax cost is $5,000,000 and is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3, and $1,300,000 in year 4?

• A) $1,700,000
• B) $371,764
• C) -$137,053
• D) -$4,862,947

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Definitions:

War Production Board

A U.S. government agency established during World War II to coordinate the production of war materials and supplies.

Allocating Resources

The process of distributing available resources, such as finances, materials, and labor, for specific tasks or projects to achieve desired objectives.

Independent Factories

Manufacturing facilities that operate autonomously, not as part of larger conglomerates or corporations, often characterized by specialized production.

Internment

The detention of a group of people, especially during wartime, without trial, often based on their nationality or ethnicity.