The Net Present Value of an Investment Project Is $28,842

question 126

Multiple Choice

The net present value of an investment project is $28,842 and its project profitability index is 0.1518. The initial investment in this project was:

• A)$190,000
• B)$25,041
• C)$215,800
• D)$185,200

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Definitions:

Per-Unit Subsidy

A financial incentive given by the government, reducing the cost of each unit of a good or service to either the producer or consumer.

Profit Maximization

A business objective to achieve the highest possible profit from operations, often by adjusting production, prices, and other variables.

Competitive Industry

An industry structure where many firms compete for market share, with no single company dominating the market.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that consumers are willing to buy.