A Security Firm Is Offered $80,000 in One Year for Providing

question 25

Multiple Choice

A security firm is offered $80,000 in one year for providing CCTV coverage of a property. The cost of providing this coverage to the security firm is $74,000, payable now, and the interest rate is 8.5%. Should the firm take the contract?

• A) Yes, since net present value (NPV) is positive.
• B) It does not matter whether the contract is taken or not, since NPV = 0.
• C) Yes, since net present value (NPV) is negative.
• D) No, since net present value (NPV) is negative.

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Definitions:

Demand for Cream

The consumer interest and willingness to purchase cream, influenced by culinary trends, diet preferences, and availability of substitute products.

Demand Curve

A graph representing the relationship between the quantity of a good desired and its price.

Price

is the amount of money expected, required, or given in payment for something.

Change in Demand

A shift in the quantity of a product or service that consumers are willing and able to buy at various prices, due to factors like changes in consumer preferences, income, or the prices of related goods.