(Appendix 13A)The Following Data Pertain to an Investment Proposal

question 118

Multiple Choice

(Appendix 13A) The following data pertain to an investment proposal:
The working capital would be released for use elsewhere when the project is completed.What is the net present value of the project,using a discount rate of 8%? (Ignore income taxes in this problem. ) (Do not round your intermediate calculations and round the final answer to the nearest whole dollar. )

• A) ($251).
• B) $251.
• C) $2,567.
• D) $5,251.

Appreciate the relevance of storytelling and narrative coherence in communication.

Utilize social media effectively in professional contexts.

Recognize the strategies to influence decision-making and belief change.

Understand the principles for effective email communication to avoid tonal misinterpretations.

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Definitions:

Financial Leverage

Financial leverage is the use of borrowed funds to increase an investment's potential return, which also increases the risk of loss.

Dividend Discount Model

A method of valuing a company's stock price by using predicted dividends and discounting them back to present value.

Myron Gordon

An economist best known for developing the Gordon Growth Model, which is used to determine the intrinsic value of a stock based on a future series of dividends that grow at a constant rate.

Burton Malkiel

An American economist and writer, most famous for his classic finance book "A Random Walk Down Wall Street."