A Project Costs $91,000 Today and Is Expected to Generate

question 68

Multiple Choice

A project costs $91,000 today and is expected to generate cash flows of $11,000 per year for the next 20 years.The firm has a cost of capital of 8 percent.Should this project be accepted,and why?

• A)Yes, the project should be accepted since it has a NPV = $15,391.23.
• B)Yes, the project should be accepted since it has a NPV = $13,610.89.
• C)Yes, the project should be accepted since it has a NPV = $16,999.62.
• D)None of these answers is correct.

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Definitions:

Amphetamine

A powerful stimulant used to treat conditions like ADHD by increasing attention and reducing impulsiveness and hyperactivity.

Ephedrine

A medication and stimulant used to prevent low blood pressure during spinal anesthesia and treat narcolepsy, obesity, and asthma.

Marijuana

A psychoactive drug derived from the Cannabis plant, used for medical or recreational purposes, known to affect mood, perception, and cognition.

Glaucoma

A group of eye conditions that can cause damage to the optic nerve, often due to high eye pressure, and can lead to vision loss if not treated.