Use the Information for the Question(s)below

question 12

Multiple Choice

Use the information for the question(s) below.
Boulderado has come up with a new composite snowboard.Development will take Boulderado four years and cost $250,000 per year,with the first of the four equal investments payable today upon acceptance of the project.Once in production the snowboard is expected to produce annual cash flows of $200,000 each year for 10 years.Boulderado's discount rate is 10%.
-The NPV profile:

• A)shows the payback period-the point at which NPV is positive.
• B)shows the internal rate of return-the point at which NPV is zero.
• C)shows the NPV over a range of discount rates.
• D)B and C are correct.

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Definitions:

Solidification

The process in which magma cools and hardens into solid rock, with or without the formation of crystals.

Meteorites

Solid pieces of debris from objects such as asteroids or comets that have survived their passage through the Earth's atmosphere and landed on the surface.

Sedimentary

relating to rock that has formed from sediment deposited by water, wind, or ice.

Igneous

Refers to rocks or minerals that solidified from molten or partly molten material, indicative of volcanic processes.