Which of the Following Is the Correct Equation to Solve

question 30

Multiple Choice

Which of the following is the correct equation to solve for the NPV of the project that has an initial outlay of $30,000,followed by three years of $20,000 in incremental cash inflow? Assume a discount rate of 10%.

• A)NPV = -30,000 + (3 × 20,000)/(1.10)³
• B)NPV = -$30,000 + $20,000/(1.10)¹ + $20,000/(1.10)² + $20,000/(1.10)³
• C)NPV = -$30,000 + $20,000/(1.01)^.10 + $20,000/(1.02)^.10 + $20,000/(1.03)^.10
• D)NPV = -$30,000 + $20,000/(1.1)^.10 + $20,000(1.2)^.10 + $20,000(1.3)^.10

---

Definitions:

Trade Publications

Magazines, journals, or newsletters specifically designed for professionals within a certain industry, providing targeted news, research, and information.

Product Placement

A promotional tactic where branded goods or services are featured in another company's product, such as a movie or television show, to increase visibility.

Television Shows

Programs broadcasted on TV designed for entertainment, education, or informational purposes.

High-Involvement Consumer Products

Products that require significant thought and research from consumers before purchase due to their complexity, cost, or personal importance.