(Ignore Income Taxes in This Problem

question 25

Multiple Choice

(Ignore income taxes in this problem. ) An investment of P dollars now will yield cash inflows of $3,000 at the end of the first year and $2,000 at the end of the fourth year.If the internal rate of return for this investment is 20%,then the value of P is:

• A)$3,463
• B)$2,499
• C)$964
• D)$4,185

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Definitions:

Carnations

A type of flower known for its distinct fragrance and variety of colors, commonly used in arrangements and bouquets.

Tariff

A tax imposed by a government on imported or exported goods to regulate trade and protect domestic industries.

Imports

Goods and services bought by residents of a country from foreign producers, representing an inflow of goods into the country.

Free Trade

An economic policy allowing unrestricted import and export of goods between countries without the imposition of tariffs, quotas, or other restrictions.