What Is the Net Present Value of a Project That

question 18

Multiple Choice

What is the net present value of a project that contributes $25,000 at the end of the first year and $12,000 at the end of the second year. The initial cost is $33,000. The appropriate interest rate is 7% for the first year and 10% for the second year.

• A) $1,579.44
• B) $559.90
• C) $281.85
• D) -$2,148.26

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Definitions:

Serosa

The outermost layer of tissue that envelops some internal organs, part of the lining of the body cavities and a structure involved in protection and secretion.

Submucosa

A layer of tissue beneath the mucosa, containing blood vessels, nerves, and lymphatics, supporting the mucosa.

Plicae Circularis

Plicae circulares are circular folds of the inner lining of the intestine, which increase the surface area for absorption of nutrients.

Intestinal Villi

Small, finger-like projections that extend into the lumen of the small intestine, greatly increasing its surface area for nutrient absorption.