Refer to the Data Provided in Table 11 -Refer to Table 11

question 151

Multiple Choice

Refer to the data provided in Table 11.1 below to answer the following question(s) .
Table 11.1 $$\begin{array}{l}\begin{array} { l c c } &\text { Total Investment }&\text {Expected Rate of Return }\\ { \text { Project } } & \text { (dollars) } & \text { (percentage) } \\\hline \text { New tablet computer for sales staff } & \$ 500,000 & 22 \\\text { Remodel for distribution center } & \$ 400,000 & 18 \\\text { On-site day care center } & \$ 200,000 & 10 \\\text { Employee fitness center } & \$ 100,000 & 8\end{array}\end{array}$$
-Refer to Table 11.1. If the interest rate is 5%, Nashbar Bicycle should

• A) fund all of the projects.
• B) not fund any of the projects.
• C) fund only the employee fitness center.
• D) fund all of the projects except for the employee fitness center.

---

Definitions:

Present Value

Today's worth of a single sum or series of future cash flows, discounted at a particular rate of return.

Future Cash Flow

The amount of money that is expected to be received or paid out by an entity in the future, often considered for investment or project valuations.

Discount Rate

It denotes the interest rate utilized for determining the present value of future cash flows in the course of discounted cash flow analysis.

Future Value

The value of an investment or cash flow at a specific future date, adjusted for time value of money and interest.