The Present Value of the Total Costs Over a Five

question 55

Multiple Choice

The present value of the total costs over a five year period for Project April is $50,000. The present value of total costs over the same 5 year period for Project October is $40,000. The company uses a discount rate of 9%. There are no positive cash flows for these projects, but one or the other is required to comply with government regulations. Which project should be chosen and why?

• A) April because it has a higher net present value (NPV).
• B) Both projects because they will add value to the company.
• C) Neither project because the NPVs are negative.
• D) October because it has a lower net present cost.

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Definitions:

Stupor

A state of near-unconsciousness or insensibility, often resulting from illness or intoxication.

Sociocultural Factors

Elements that encompass societal and cultural influences on an individual's behavior, thoughts, and emotions.

Warm Supportive Friends

Friends who provide encouragement, understanding, and care in a consistent and unconditional manner, contributing positively to one's emotional well-being.

Outcomes

The results or effects of an action, situation, or event; the endpoint of a process or activity.