A Given Project Requires a $30,000 Investment and Is Expected

question 7

Multiple Choice

A given project requires a $30,000 investment and is expected to generate end-of-period annual cash inflows as follows:
$$\begin{array} { c c c c } \text { Year 1 } & \text { Year 2 } & \text { Year 3 } & \text { Total } \\\hline \$ 12,000 & \$ 8,000 & \$ 10,000 & \$ 30,000\end{array}$$
Assuming a discount rate of 10%,what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below:
$$\begin{array} { c c c } i = 10 \% & i = 10 \% / 4 & i = 10 \% / 1 \\n = 1 & n = 2 & n = 3 \\\hline .9091 & .8264 & .7513\end{array}$$

• A) $0.00
• B) $21,000.00
• C) ($7,461.00)
• D) $25,033.32
• E) ($4,966.68)

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Definitions:

Factor Markets

Markets in which firms buy the resources they need to produce goods and services.

Highly Educated Workers

Individuals who have attained a high level of education, often including university degrees, which typically equips them with specialized skills.

Unskilled Workers

Workers who possess no specific skills or qualifications, and are therefore suited for jobs that require only basic tasks and minimal training.

Import Quota

A legal limit on the quantity of a good that can be imported.