An Investor Is Considering a Project That Will Generate $900,000

question 68

Multiple Choice

An investor is considering a project that will generate $900,000 per year for four years. In addition to upfront costs, at the completion of the project at the end of the fifth year there will be shut-down costs of $400,000. If the cost of capital is 4.4%, based on the MIRR, at what upfront costs does this project cease to be worthwhile?

• A) $2.62 million
• B) $2.91 million
• C) $3.21 million
• D) $3.50 million

---

Definitions:

Tree Leaves

The photosynthetic organs of trees, usually green, capturing sunlight for energy production and playing a crucial role in gas exchange.

Opponent-process Theory

A psychological and neurological model that explains a wide range of behaviors, including color vision and emotions, by proposing that opposing processes operate within the body to maintain balance.

Young-Helmholtz Theory

A theory of color vision that proposes the eye contains three types of color receptors sensitive to red, green, and blue.

Fovea

The central portion of the retina, where visual acuity (sharpness of vision) is highest.