The Manufacture of Folic Acid Is a Competitive Business

question 31

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 1?

• A)+$76,569
• B)-$23,400
• C)$48,600
• D)None of the options are correct.

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Definitions:

International Business

The buying, selling, and trading of goods and services across national boundaries.

Large Corporations

Extensive organizations known for their sizable employee count, large operational scope, and substantial market influence.