Asked by Colin Stubblefield on May 05, 2024
Verified
The net present value of this investment would be:
A) $(14,350)
B) $107,250
C) $77,200
D) $200,000
Investment
An asset or item acquired with the goal of generating income or appreciation.
Net Present Value
The difference between the current value of cash inflows and the current value of cash outflows over a period of time.
- Assess the net present value (NPV) of an investment to ascertain its financial worthiness.
Verified Answer
AA
Adewoye AkinjideMay 07, 2024
Final Answer :
B
Explanation : 
Reference: CH12-Ref4
(Ignore income taxes in this problem.)Fast Food, Inc., has purchased a new donut maker.It cost $16,000 and has an estimated life of 10 years.The following annual donut sales and expenses are projected:
Assume cash flows occur uniformly throughout a year except for the initial investment.
Reference: CH12-Ref4(Ignore income taxes in this problem.)Fast Food, Inc., has purchased a new donut maker.It cost $16,000 and has an estimated life of 10 years.The following annual donut sales and expenses are projected:
Assume cash flows occur uniformly throughout a year except for the initial investment.
Learning Objectives
- Assess the net present value (NPV) of an investment to ascertain its financial worthiness.