MsCard Bought an Investment That Will Generate the Following Cash

question 33

Multiple Choice

Ms.Card bought an investment that will generate the following cash flows over a three-year period.Use Appendix A. If Ms.Card's marginal tax rate over the three-year period is 40% and she uses a 6% discount rate,compute the NPV of the transaction (round the final answer to the nearest whole dollar) .

• A)$94,129
• B)$84,964
• C)$62,373
• D)None of the above.

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Definitions:

Independent Variable

A variable in an experiment or model that is manipulated or changed to assess its effects on a dependent variable.

Scattergraph

A graphical representation used in cost accounting to show the relationship between a cost (dependent variable) and its driver (independent variable).

Contribution Margin Ratio

The proportion of sales revenue that remains after variable costs are subtracted, represented as a percentage of total sales.

Selling Price

The amount of money for which a product or service is sold to customers.