Post Utme Ims U 2019 Commerce Question 14

Practice objective / multiple choice question 14 from the 2019 Post Utme Ims U Commerce examination.

Post Utme Ims U 2019 Commerce Objective / Multiple Choice

Question 14 POST_UTME_IMS_U • 2019 • COMMERCE • objective

A firm is considering two production processes. Process A requires an initial investment of ₦100,000 and generates a profit of ₦20,000 per year. Process B requires an initial investment of ₦150,000 and generates a profit of ₦30,000 per year. Which process has a higher net present value (NPV) if the discount rate is 10%?

Correct Answer A. Process A

B. Process B

C. Both processes have the same NPV

D. Neither process has a higher NPV

Correct Answer

Correct Option:

Process A

This is Post Utme Ims U 2019 Commerce Question 14. It is one of the objective questions from the 2019 Post Utme Ims U Commerce examination.

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