A Security Firm Is Offered $80,000 in One Year for Providing

question 25

Multiple Choice

A security firm is offered $80,000 in one year for providing CCTV coverage of a property. The cost of providing this coverage to the security firm is $74,000, payable now, and the interest rate is 8.5%. Should the firm take the contract?

• A) Yes, since net present value (NPV) is positive.
• B) It does not matter whether the contract is taken or not, since NPV = 0.
• C) Yes, since net present value (NPV) is negative.
• D) No, since net present value (NPV) is negative.

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Definitions:

Residential Care

A form of long-term care provided in residential facilities for individuals who need assistance with daily living activities due to age, illness, or disability.

Reality

The quality or state of being actual or true, experienced through the senses.

Visual Illusions

Perceptual anomalies where the observed images differ from objective reality, often highlighting the complex nature of human perception.