A Firm Has an Opportunity to Invest $1 000 000

question 8

Multiple Choice

A firm has an opportunity to invest $1 000 000 today that will yield $1 100 000 in one year. If interest rates are 7.5%, what is the net present value (NPV) of this investment?

• A)$24 151
• B)$25 000
• C)$29 000
• D)$23 256

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Definitions:

Connective

In logic and mathematics, a symbol or word used to connect statements or propositions, such as "and", "or", "if...then".

Restrictive

Imposing limitations or conditions on something's scope, use, or extent.

Nonrestrictive

Describing a clause or phrase that provides additional information without limiting the meaning of the sentence.

Nonrestrictive Clause

A type of clause in a sentence that provides additional information but does not limit or restrict the meaning of the main clause.