Suppose a Project Requires an Initial Investment of $10,000 and It

question 134

Multiple Choice

Suppose a project requires an initial investment of $10,000 and it will yield $10,500 one year later.The NPV of the project is:

• A) equal to $500.
• B) less than 0 if the discount rate is less than 5 percent.
• C) zero if the discount rate is equal to 5 percent.
• D) positive if the discount rate is greater than 5 percent.

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Definitions:

Thomas Jefferson

An American Founding Father, the principal author of the Declaration of Independence, and the third President of the United States, serving from 1801 to 1809.

John Jay

An American statesman, Patriot, diplomat, Founding Father, signatory of the Treaty of Paris, and first Chief Justice of the United States.

Constitutional Convention

A formal meeting called for the purpose of creating or revising a constitution.

Slavery

A system in which individuals are owned by others, deprived of personal freedom, and compelled to perform labor or services.