You Have Been Asked to Evaluate an Infinitely-Lived Project

question 30

Multiple Choice

You have been asked to evaluate an infinitely-lived project. Sales in the first year are projected to be $100. Costs are projected at $50. There is no depreciation, and the tax rate is 30%. The real required return is 10%. The inflation rate is projected to be 8%. Sales and costs will increase at the rate of inflation. The project costs $300. What is the NPV?

• A) $142.03.
• B) $36.36.
• C) $71.72.
• D) $24.07.

---

Definitions:

Medicare

A federal health insurance program in the United States primarily for people who are 65 or older, as well as for some younger people with disabilities or specific diseases.

United States Congress

is the bicameral legislature of the federal government of the United States, consisting of two houses: the Senate and the House of Representatives.

Health Insurance

A system of financial protection against medical expenses for individuals, where costs are covered by insurance contributions or premiums.

Adverse Outcomes

Negative results or effects that may occur as a consequence of an action, intervention, or condition.