Consider a Project That Requires an Investment of $28,000 Today

question 9

Multiple Choice

Consider a project that requires an investment of $28,000 today and generates after-tax cash flows of $10,000 per year for the next four years.The appropriate discount rate is 15 percent.What are the project's NPV and IRR?

• A) NPV = -$264.37; IRR = 14.85%
• B) NPV = $335.92; IRR = 15.34%
• C) NPV = $549.78; IRR = 15.97%
• D) NPV = $738.26; IRR = 16.13%

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Definitions:

Zero Standard Deviation

A statistical measure indicating that all values within a data set are identical; there is no variability.

Average Temperature

The mean value of temperature taken over a specified period of time.

Standard Deviation

A statistical measure that quantifies the variation or dispersion of a set of data points or values from their mean (average).

Expected Value

The weighted average of all possible values of a random variable, with weights being their probabilities.