You Are Offered an Investment Opportunity That Costs You $28,000

question 6

Multiple Choice

You are offered an investment opportunity that costs you $28,000, has an NPV of $2278, lasts for three years, has interest rate of 10%, and produces the following cash flows: The missing cash flow from year 2 is closest to:

• A)$12,500
• B)$12,000
• C)$13,000
• D)$10,000

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Definitions:

Variables

Elements, features, or factors that are likely to vary or change.

Economists

Professionals who study how societies use available resources to produce valuable commodities and distribute them among different people.

Normative Statement

Describes expressions of what ought to be rather than what is, often reflecting opinions or prescriptions for policy rather than objective statements.

Legal Age

The age at which an individual is recognized by law as an adult and capable of accepting responsibility for actions.