A Project Will Not Produce Any Cash Flows for Two

question 69

Multiple Choice

A project will not produce any cash flows for two years.Starting in the third year,it will produce annual cash flows of $11,900 a year for two years.The project initially costs $43,600.In Year 6,the project will be closed and as a result should produce a final cash inflow of $50,500.What is the net present value of this project if the required rate of return is 8.7 percent?

• A)$5,474.76
• B)$4,802.57
• C)$3,935.56
• D)$7,465.95
• E)$5,447.76

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Definitions:

Negligence

A legal concept involving the failure to act with the care that a reasonably prudent person would exercise in similar circumstances, leading to harm or damage.

Tort Action

A lawsuit brought to recover damages for a private wrong or injury that was not contracted for, such as negligence, defamation, or trespass.

Self-Defence

The right to respond to an assault with as much force as is reasonable in the circumstances.

Assault And Battery

Legal terms where "assault" refers to the threat of bodily harm, while "battery" refers to the actual physical impact on another person.