Marlin Liquidators Is Considering the Purchase of a New $175,000

question 48

Multiple Choice

Marlin Liquidators is considering the purchase of a new $175,000 crane.If Marlin expects the cash inflows to be $45,000 after the first year,$76,000 after the second year,and $80,000 after the third year,what is the NPV if the cost of capital is 15%? Round answer to the nearest whole dollar amount.

• A) +$149,196
• B) +$26,000
• C) +$18,800
• D) -$25,801
• E) -$18,800

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Definitions:

Offset Conditions

Conditions that allow entities to negate or counterbalance one position with another, commonly used in accounting and finance to manage risk or net-off liabilities against assets.

Different Financial Instruments

Various types of investment assets, including stocks, bonds, derivatives, and mutual funds, that provide a way for individuals and businesses to invest, finance operations, or manage risk.

Financial Instrument

A contract that leads to the creation of a financial asset for one party and results in a financial liability or equity instrument for another party.

Market Risk

The risk that the value of a financial instrument will fluctuate because of changes in foreign exchange rates, market interest rates or some other market prices.