AFP
CTP · Question #661
(Topic 7) A treasurer is evaluating a project that will cost $1,000 but will return cash flows of $225, $225, $300, $750, and $750 in years 1 through 5, respectively. The company's interest rate on…
The correct answer is A. $364.74. See the full explanation below for the reasoning.
Question
- (Topic 7)
A treasurer is evaluating a project that will cost $1,000 but will return cash flows of $225, $225, $300, $750, and $750 in years 1 through 5, respectively. The company’s interest rate on its debt is 10% and its marginal cost of capital is 15%. What is the Net Present Value (NPV) of this project?
Options
- A$364.74
- B$459.48
- C$593.84
- D$643.47
How the community answered
(47 responses)- A81% (38)
- B2% (1)
- C6% (3)
- D11% (5)
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