The NPV of an Investment That Costs $2700 and Pays

question 4

Multiple Choice

The NPV of an investment that costs $2700 and pays $1000 certain at the end of one,three,and five years is closest to:

• A)$21.47.
• B)$1665.62.
• C)-$100.26.
• D)-$71.38.

---

Definitions:

Credited

Recognized or recorded as an increase in assets or a decrease in liabilities in accounting records.

Accrued Expense

Expenses that have been incurred but not yet paid, representing liabilities for goods or services received but not yet invoiced.

Recognising

The process of recording an item in the financial statements when it meets the criteria set by accounting standards.