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A Project Has an Initial Cost of $26,000,a Discount Rate

Question 20

Multiple Choice

A project has an initial cost of $26,000,a discount rate of 11.7 percent,a life of 5 years,and an NPV of $11,216.Given this,you know that the project is expected to earn a return:


A) equal to 11.7 percent of $26,000 plus an additional $11,216.
B) of $11,216 in total.
C) equal to 11.7 percent of $37,216 (= $26,000 + 11,216) .
D) of 11.7 percent of $11,216.
E) of $26,000 minus $11,216.

Correct Answer:

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