Solved

A Project Costs $25,000 and Will Return $27,500 Next Year

Question 57

Multiple Choice

A project costs $25,000 and will return $27,500 next year. Taxable bonds that are similar in risk to the project return 11% while similar-risk, tax-exempt bonds are yielding 8%. You pay taxes
At the marginal rate of 25%. What is the NPV of this project? Round your answer to the
Nearest dollar.


A) -$225
B) -$173
C) -$116
D) +$463

Correct Answer:

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