A Project Requires a $30,000 Investment and Is Expected to Generate

question 127

Multiple Choice

A project requires a $30,000 investment and is expected to generate end-of-period annual cash inflows as follows: $$\begin{array} { l c c c } \text { Year 1 } & \text { Year 2 } & \text { Year 3 } & \text { Total } \\\$ 12,000 & \$ 8,000 & \$ 10,000 & \$ 30,000\end{array}$$ 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) $21,000.00
• C) ($7,461.00)
• D) $25,033.32
• E) ($4,966.60)

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