If $10,000 Is Invested in a Certain Business at the Start

question 52

Multiple Choice

If $10,000 is invested in a certain business at the start of the year,the investor will receive $3000 at the end of each of the next four years.What is the net present value (NPV) of this business opportunity if the interest rate is 7% per year?

• A)$148.53
• B)$161.63
• C)$172.45
• D)$178.88
• E)$183.43

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Definitions:

Automating

The process of implementing systems and technology to perform tasks without human intervention, often to improve efficiency and accuracy.

Operating Expenses

Costs incurred in the regular functioning of a business, excluding direct production costs; these may include rent, utilities, and administrative salaries.

Sales Revenues

Income earned by a company from its sales of goods or services, before any deductions.

Annual Depreciation

The annual expense taken for a fixed asset, representing a fraction of its cost spread over its lifespan.