Which one of the following should be assumed about a project that requires a $100,000 investment at time zero, then returns $20,000 annually for 5 years? A. The NPV is negative. B. The NPV is zero. C. The profitability index is 1.0. D. The IRR is negative.
Which one of the following should be assumed about a project that requires a $100,000 investment at time zero, then returns $20,000 annually for 5 years? A. The NPV is negative. B. The NPV is zero. C. The profitability index is 1.0. D. The IRR is negative.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![80.
Which one of the following should be assumed about a project that requires a $100,000 investment at time zero, then returns
$20,000 annually for 5 years?
A. The NPV is negative.
B. The NPV is zero.
C. The profitability index is 1.0.
D. The IRR is negative.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F439d53b1-c1f8-40e5-b808-5f4d3f0c6384%2Fd3e9950d-de5b-4ede-aeea-6c43d57a6365%2Fm92eus9_processed.png&w=3840&q=75)
Transcribed Image Text:80.
Which one of the following should be assumed about a project that requires a $100,000 investment at time zero, then returns
$20,000 annually for 5 years?
A. The NPV is negative.
B. The NPV is zero.
C. The profitability index is 1.0.
D. The IRR is negative.
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