Post Utme Unn 2020 Economics Question 24

Practice objective / multiple choice question 24 from the 2020 Post Utme Unn Economics examination.

Post Utme Unn 2020 Economics Objective / Multiple Choice
Question 24 POST_UTME_UNN • 2020 • ECONOMICS • objective

A firm is considering investing in a new project with the following cash flows: Year 1: -10, Year 2: 20, Year 3: 30. If the firm's \cost of capital is 10%, what is the net present value (NPV) of the project?

Answer Options

Correct Answer A. \( NPV = -10 + \frac{20}{1.1} + \frac{30}{1.1^2} \)
B. \( NPV = -10 + \frac{20}{1.1^2} + \frac{30}{1.1} \)
C. \( NPV = -10 + \frac{20}{1.1} + \frac{30}{1.1^2} - 10 \)
D. \( NPV = -10 + \frac{20}{1.1^2} + \frac{30}{1.1} - 10 \)
Correct Answer
A
Correct Option:
\( NPV = -10 + \frac{20}{1.1} + \frac{30}{1.1^2} \)

About This Question

This is Post Utme Unn 2020 Economics Question 24. It is one of the objective questions from the 2020 Post Utme Unn Economics examination.

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