If a One-Year Project Costs $100,000 and Is Expected to Return

question 265

Multiple Choice

If a one-year project costs $100,000 and is expected to return the firm $105,000, the rate of return of the project is:

• A) 4.8%.
• B) 5%.
• C) $5,000.
• D) $105,000.

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Definitions:

Small Denomination

Currency or securities issued in low nominal values, making them more accessible for small transactions or savings.

Large Denomination

References currency or financial instruments issued in large nominal amounts, often used in high-value transactions.

M2

A measure of the money supply that includes cash, checking deposits, and easily convertible near money, such as savings deposits, money market securities, and other time deposits.

Money Market

A sector of the financial market where short-term borrowing, lending, buying, and selling with original maturities of one year or less occur.