Which of the Following Is the Correct Equation to Solve

question 34

Multiple Choice

Which of the following is the correct equation to solve for the NPV of the project that has an initial outlay of $30,000, followed by three years of $20,000 in incremental cash inflow? Assume a discount rate of 10%.

• A) NPV = -30,000 + (3 × 20,000)/(1.10)3
• B) NPV = -$30,000 + $20,000/(1.10)1 + $20,000/(1.10)2 + $20,000/(1.10)3
• C) NPV = -$30,000 + $20,000/(1.01).10 + $20,000/(1.02).10 + $20,000/(1.03).10
• D) NPV = -$30,000 + $20,000/(1.1).10 + $20,000(1.2).10 + $20,000(1.3).10

Analyze the impact of exchange rate fluctuations on currency value.

Perform basic mathematical operations to solve currency conversion problems.

Interpret exchange rate information from given data.

Estimate the cost of foreign purchases in domestic currency.

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Definitions:

ES

Enterprise Systems, large-scale software packages that support business processes, information flows, reporting, and data analytics in complex organizations.

DSS

Decision Support System, a computerized program used to support decision-making activities in an organization.

Batch Processing

Transaction processing system (TPS) that processes data in batches at fixed periodic intervals.

OLAP

Online Analytical Processing, a category of software tools that provide analysis of data stored in a database for complex queries and analyses.