A project will cost $4m in the current year, but generate income of $5m per year over the next seven years.The cost of capital is 6%.What is the net present value (NPV) of this investment?The annuity factor at 6% is 5.582
A. $31.00m
B. $20.59m
C. $23.91m
D. $17.39m
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Using IRR and NPV, which project would a business choose?
Which of the following is a definition of working capital?
A. Current assets
B. Current assets less current liabilities
C. Trade receivables less trade liabilities
D. Cash and cash equivalents
A business's cash budget shown an expected deficit for the next quarter.Which of the following actions should the business consider before arranging financing?
A. Delaying payment of staff wages
B. Trying to negotiate better terms with suppliers
C. Giving customers longer to pay
D. Starting to pay cash for purchases
In different economic times businesses make decisions as to how much cash they should hold. In the situations below will they increase their cash reserves or decrease them?Boom
A. Increase cash
B. Decrease cash