Certification of Capability in Business Analysis (CCBA) — Question 352
A business analyst has determined that a project should be worth $2,750,000 in four years if her company decides to pursue the project. Assuming the rate of return on the investment is six percent, what is the minimum amount of funds the organization should invest in this project?
Answer options
- A. $2,585,000.00
- B. $2,749,001.99
- C. $2,178,257.57
- D. $165,000
Correct answer: D
Explanation
The correct answer is D because it represents the present value of the future amount of $2,750,000 discounted at a six percent rate over four years. The other options represent amounts that exceed the present value calculation, making them incorrect for the required initial investment.