Allan Decides to Invest in a New Company Which Would

question 96

Multiple Choice

Allan decides to invest in a new company which would allow him to receive $250,000 at the end of each year for the next 5 years.He purchases 100,000 shares at the price of $6.50.What is the NPV of a single share,if the interest rate is 15% per year?

• A)$8.38
• B)$1.88
• C)$6.00
• D)$838,038.77
• E)$188,038.77

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Definitions:

Ottawa Chief

A title referring to the leader of the Ottawa, a Native American people historically located in the Great Lakes region, often associated with leaders like Pontiac who played significant roles in colonial-era conflicts.

Indian Uprising

A revolt or rebellion by Indigenous peoples against colonial or national authorities, often aiming to assert rights, autonomy, or resist displacement.

Pontiac

A leader among the Native American Ottawa people, known for his role in Pontiac's War against British forces in the 18th century.

Fur Trade

The exchange of animal fur, especially beaver pelts, between trappers, traders, and indigenous peoples for goods.