Use the Following Information to Answer the Question(s)below

question 57

Multiple Choice

Use the following information to answer the question(s) below.
Taggart Transcontinental is considering adding a trucking division to expand the coverage of its existing rail lines.The trucking division will cost $1,000,000 and is expected to generate free cash flows of $100,000 for each of the next five years.Taggart Transcontinental forecasts that future free cash flows after year 5 will grow at 2% per year,forever.Taggart Transcontinental's cost of capital is 10%.
-The NPV for the trucking division is closest to:

• A)$170,750.
• B)$200,000.
• C)$212,550.
• D)$250,000.
• E)$312,500.

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Definitions:

Negative Therapy Effect

An adverse outcome in psychotherapy where the patient's symptoms worsen instead of improving.

Biopsychosocial Approach

A holistic perspective for understanding human health and illness that integrates biological, psychological, and social factors.

Biomedical

Pertaining to the application of biological and physiological principles to clinical practice and medical technology.

Psychodynamic

A psychological theory and therapy that emphasizes the interplay of unconscious drives and forces in shaping personality and behavior.