Use the Table for the Question(s) Below

question 77

Multiple Choice

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

-Suppose the term structure of interest rates is shown below: The net present value (NPV) of an investment that costs $4320 and pays $1600 certain at the end of one, three, and five years is closest to ________.

• A) $91.37
• B) $137.05
• C) $114.21
• D) -$114.21

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Definitions:

Consumer Division

A part of a company focused on selling products or services directly to end-users or consumers.

Fixed Expenses

Expenses that remain constant regardless of the amount of goods produced or sold, including costs like lease payments, wages, and insurance fees.

Break-even Sales

The amount of revenue required to cover both the variable and fixed costs of production, resulting in no profit or loss.

Fixed Expenses

Costs that do not vary with the level of production or sales volume, such as rent or salaries.