Mini Inc Is Contemplating a Capital Project Costing $47,019 This Project Is
A)unacceptable Because It Earns a Rate Less

question 85

Multiple Choice

Mini Inc. is contemplating a capital project costing $47,019. The project will provide annual cost savings of $18,000 for 3 years and have a salvage value of $3,000. The company's required rate of return is 10%. The company uses straight-line depreciation. $\begin{array}{llr}\text { Year } &\text { Present Value } & \text { PV of an Annuity } \\&\text { of } 1 \text { at } 10 \%&\text { of } 1 \text { at } 10 \%\\1 & .909 & .909 \\2 & .826 & 1.736 \\3 & .751 & 2.487\end{array}$ This project is

• A)unacceptable because it earns a rate less than 10%.
• B)acceptable because it has a positive NPV.
• C)unacceptable because it has a negative NPV.
• D)acceptable because it has a zero NPV.

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Definitions:

IR

Infrared spectroscopy, a technique used to analyze and identify chemical substances based on their interaction with infrared light.

MS

Mass spectrometry, an analytical technique used to measure the mass-to-charge ratio of ions, useful in determining the composition of a sample or molecule.

Molecular Formula

An expression that indicates the number and type of atoms present in a single molecule of a substance.

IR

Infrared radiation, often used in spectroscopy to identify compounds based on molecular vibrations.