What Is the Project's NPV If It Requires an Initial

question 112

Multiple Choice

What is the project's NPV if it requires an initial cash outlay of $50,000 and pays $8,000 per year indefinitely? Assume the appropriate discount rate is 15 percent and the tax rate is zero.

• A) -$3,623.19
• B) $1,479.82
• C) $3,333.33
• D) $53,333.33

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Definitions:

Non-Value Added Activities

Processes or actions that consume resources but do not directly contribute to the final product or customer value, often targeted for elimination in efficiency efforts.

Schematic

A diagram that represents the elements of a system using abstract, graphic symbols rather than realistic pictures.

Movement Of People

The collective migration or travel of individuals or groups from one location to another, relevant in various contexts including economics, urban planning, and sociology.

Labour Standards

Established benchmarks for the amount of time required for a worker to complete specific tasks.