Use the Table for the Question(s)below

question 76

Multiple Choice

Use the table for the question(s) below.
Suppose the term structure of interest rates is shown below:

-The net present value (NPV) of an investment that costs $2 700 and pays $1 000 at the end of one, three, and five years is closest to:

• A)$1 665.62
• B)-$100.26
• C)$21.47
• D)-$71.38

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Definitions:

Pre-Acquisition Dividend

Dividends declared by a subsidiary prior to being acquired or controlled by the parent company.

Final Dividend

The last dividend payment made by a company to its shareholders for a fiscal year, after the company's final annual earnings are known.

Tax-Effect Adjustment

Adjustments made to account for the tax implications of differences between accounting and tax treatments of items, ensuring financial statements reflect future tax liabilities or assets.

Intragroup Services

Services provided by one entity within a corporate group to another entity within the same group.