Cheryl Peck Purchased a Computer Network for Her Classroom

question 39

Multiple Choice

Cheryl Peck purchased a computer network for her classroom.The computer network cost $100,000.She estimates that she can charge $500 for one session in the classroom.Cheryl knows that enrollment will increase over time.She estimates 50 students the first year,75 students the second year,100 students the third year,and 150 students the fourth year.If her cost of capital is 16 percent,what is the approximate net present value?

• A)$87,500
• B)$22,881
• C)$35,471
• D)$19,156

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Definitions:

Offeror

The party in a contractual agreement who proposes the terms of an offer to another party (the offeree).

Consideration

Consideration refers to something of value promised to another party in exchange for something else, forming a legal reason for parties to enter into a contract.

Common Law

A body of unwritten laws based on legal precedents established by the courts, distinct from statutory law.

Article 2

Often refers to a specific section within a constitution or a part of a legal code dealing with a particular area, such as commercial transactions in the U.S. Uniform Commercial Code.