Poulsen Industries Is Analyzing an Average-Risk Project, and the Following

question 24

Multiple Choice

Poulsen Industries is analyzing an average-risk project, and the following data have been developed.Unit sales will be constant, but the sales price should increase with inflation.Fixed costs will also be constant, but variable costs should rise with inflation.The project should last for 3 years, it will be depreciated on a straight-line basis, and there will be no salvage value.This is just one of many projects for the firm, so any losses can be used to offset gains on other firm projects.The marketing manager does not think it is necessary to adjust for inflation since both the sales price and the variable costs will rise at the same rate, but the CFO thinks an adjustment is required.What is the difference in the expected NPV if the inflation adjustment is made vs.if it is not made?

• A)$13,286
• B)$13,985
• C)$14,721
• D)$15,457
• E)$16,230

---

Definitions:

Bias-Free Language

Language that avoids prejudices or stereotyping, ensuring fairness and equality in communication.

Gender Bias

The inclination or prejudice towards one gender over another, often leading to unequal treatment.

Bias-Free Language

Language choices that avoid bias and stereotypes, aiming for fairness and inclusivity in communication.

Biased Language

Language that reflects a preconceived preference or prejudice towards a particular viewpoint, individual, or group, often leading to unfair or discriminatory implications.