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Determine the Net Present Value (NPV) of an Investment Decision

Question 24

Multiple Choice
Determine the net present value (NPV) of an investment decision to purchase a property for $90,000 that will generate annual cash flows of $10,000 per year for eight years and sell for $80,000 at the end of the eight year holding period, if the appropriate discount rate is 10%? (Note: assume payments are made at end of year)
A) -$2,475
B) - $609
C) + $609
D) +$2,475

Determine the net present value (NPV) of an investment decision to purchase a property for $90,000 that will generate annual cash flows of $10,000 per year for eight years and sell for $80,000 at the end of the eight year holding period, if the appropriate discount rate is 10%? (Note: assume payments are made at end of year)


A) -$2,475
B) - $609
C) + $609
D) +$2,475

Correct Answer:

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