A Project Requires a $28,500 Investment and Is Expected to Generate

question 25

Multiple Choice

A project requires a $28,500 investment and is expected to generate end-of-period annual cash inflows of $12,000 for each of three years. Assuming a discount rate of 10%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below: $$\begin{array} { c c c } = 10 \% & i = 10 \% & i = 10 \% \\n = 1 & n = 2 & n = 3 \\0.9091 & 0.8264 & 0.7513\end{array}$$

• A) $0.00
• B) $2,668.00
• C) ($7,461.00)
• D) $1,341.60
• E) $29,841.60