Answer :
To determine the net amount received by the company, we need to calculate the present value of the cash flows and subtract the initial investment.
Assuming the cash flows are received annually and the required rate of return is given, we can calculate the present value of each cash flow and sum them up.
Let's assume the initial investment is EUR 100,000 and the cash flows for each year are as follows: EUR 20,000, EUR 30,000, EUR 40,000, EUR 50,000, and EUR 60,000.
To calculate the present value of each cash flow, we divide the cash flow by (1 + r)^n, where r is the required rate of return and n is the number of years.
PV = CF / (1 + r)^n
Using the given required rate of return, we can calculate the present value of each cash flow:
PV1 = EUR 20,000 / (1 + r)^1
PV2 = EUR 30,000 / (1 + r)^2
PV3 = EUR 40,000 / (1 + r)^3
PV4 = EUR 50,000 / (1 + r)^4
PV5 = EUR 60,000 / (1 + r)^5
Next, we sum up the present values of the cash flows:
Net Present Value (NPV) = PV1 + PV2 + PV3 + PV4 + PV5
If the NPV is positive, it indicates that the net amount received by the company is greater than the initial investment. If the NPV is negative, it means the net amount received is less than the initial investment.
Based on the given options, the answer would be the option that represents the positive NPV, indicating the net amount received by the company if it acts rationally.
Since the specific cash flows and required rate of return are not provided, it is not possible to calculate the exact NPV and determine the correct option.
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