An Investment of $1

Multiple Choice

An investment of $1.5 million is expected to generate cash flows of $600 000 p.a. ,at constant prices,over the next three years.Given that the nominal required rate of return is 12% p.a.and that prices are expected to increase at the rate of 5% p.a. ,the project's net present value is:

A) ($58 901)
B) $84 229
C) (187 031)
D) $13 154