An Investment Project Requires an Outlay of $100,000, and Is

question 82

Multiple Choice

An investment project requires an outlay of $100,000, and is expected to generate annual cash inflows of $28,000 for the next 5 years. The cost of capital is 12 percent. Determine a net present value for the project.

• A)$940
• B)$100,940
• C)$77,884
• D)$40,000

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Definitions:

Cash

Money in the form of coins and banknotes, as opposed to checks, credit, or other forms of digital or electronic payment.

Sweater

A knitted garment typically made of wool, cotton, or synthetic yarn, worn over the upper body to keep warm.

Significant Other

A person with whom someone has an established romantic or sexual relationship or a close and important relationship.

Indifference Map

A graphical representation showing combinations of goods among which a consumer is indifferent, indicating preferences and trade-offs.