Which of the Following Is a Correct Equation to Solve

question 3

Multiple Choice

Which of the following is a correct equation to solve for the NPV of the project that has an initial outlay of $30,000,followed by incremental cash inflows in the next 3 years of $15,000,$20,000,and $30,000? Assume a discount rate of 10%.

• A)NPV = - $30,000 + $15,000(1.10)¹ + $20,000(1.10)² + $30,000(1.10)³
• B)NPV = - $30,000 + $15,000/(1.10)¹ + $20,000/(1.10)² + $30,000/(1.10)³
• C)NPV = - $30,000 + $15,000/(1.01)^.10 + $20,000/(1.02)^.10 + $30,000/(1.03)^.10
• D)NPV = - $30,000 + $15,000/(1.1)^.10 + $20,000(1.2)^.10 + $30,000(1.3)^.10

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Definitions:

First Impressions

The initial thoughts or judgments formed about someone or something at the beginning of an encounter, often lasting and difficult to change.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors in judging others' behavior.

Proximity

The physical or psychological closeness between people, which can influence attraction and social relations.

Altruistic Behavior

Actions taken to benefit others without expectation of reward or recognition, often at a cost to oneself.