The Manufacture of Folic Acid Is a Competitive Business $$43,300; and Year 3: +$58,300

question 17

Multiple Choice

The manufacture of folic acid is a competitive business. A new plant costs $100,000 and lasts for three years. The cash flow from the plant is as follows: year 1: +$43,300; year 2: + $$43,300; and year 3: +$58,300. (Assume no taxes.) If the discount rate is 20 percent, what is the value of the plant at the end of year 2? Round to the nearest $100.

• A)$48,600
• B)$38,520
• C)-$51,600
• D)Zero

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The degree of importance given to the ethical dimension of decisions and actions.

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Individuals or entities that own shares in a corporation, giving them a claim on part of the company's assets and earnings.

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