. Roman Knoze is considering the following investment. The project will cost $20,000 initially, and will return $5,000 in year 1, $10,000 in year 2, and $15,000 in year 3. Roman requires a minimum rate of return of 10%. What is the net present value of the project? A. $5,670 B. $2,530 C. $24,070 D. $4,070

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...
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20. Roman Knoze is considering the following investment. The project will cost $20,000
initially, and will return $5,000 in year 1, $10,000 in year 2, and $15,000 in year 3. Roman
requires a minimum rate of return of 10%. What is the net present value of the project?
A. $5,670
B. $2,530
C. $24,070
D. $4,070
8
Transcribed Image Text:20. Roman Knoze is considering the following investment. The project will cost $20,000 initially, and will return $5,000 in year 1, $10,000 in year 2, and $15,000 in year 3. Roman requires a minimum rate of return of 10%. What is the net present value of the project? A. $5,670 B. $2,530 C. $24,070 D. $4,070 8
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