Charles Henri Is Considering Investing $37,800 in a Project That

question 45

Multiple Choice

Charles Henri is considering investing $37,800 in a project that is expected to provide him with cash inflows of $11,600 at the end of each of the first two years and $20,000 at the end of the third year.What is the project's NPV at a discount rate of 0 percent? At 5 percent? At 10 percent?

• A)$0; $1,045.91; -$2,641.47
• B)$4,468.39; $38.29; -$2,784.08
• C)$5,400; $1,045.91; -$2,641.47
• D)$5,400; $417.92; -$3,406.10
• E)$4,468.39; $38.29; -$2,641.47

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Definitions:

Actual Manufacturing Overhead Costs

The incurred expenses related to producing goods that are not directly tied to the product such as utilities, rent, and maintenance.

Overapplied Overhead

A situation where the allocated manufacturing overhead costs for a period exceed the actual overhead costs incurred.

Manufacturing Overhead Costs

All indirect costs associated with the production process, such as utilities, rent, and salaries for non-direct labor.

Actual Manufacturing Overhead Costs

The real costs incurred from indirect manufacturing expenses such as utilities, rent, and salaries not directly tied to production.