Reference: 10-03
Apex Corp -The Net Present Value Is Closest To?
A)$20,400

question 38

Multiple Choice

Reference: 10-03
Apex Corp. is planning to buy production machinery costing $100,000. This machinery's expected useful life is five years, with no residual value. Apex uses a discount rate of 10% and has calculated the following data pertaining to the purchase and operation of this machinery: $$\begin{array} { | c | c | } \hline \text { Year } & { \begin{array} { c } \text { Estimated } \\\text { annual net } \\\text { cash inflow }\end{array} } \\\hline 1 & \$ 60,000 \\\hline 2 & 30,000 \\\hline 3 & 20,000 \\\hline 4 & 20,000 \\\hline 5 & 20,000 \\\hline\end{array}$$
-The net present value is closest to?

• A)$20,400.
• B)$80,000.
• C)$50,000.
• D)$28,400.

---

Definitions:

Lumbar

The lumbar region is the lower part of the spine consisting of five vertebrae, known for bearing much of the body's weight and for being a common site of back pain.

Sacral

Pertaining to the sacrum, the triangular bone at the base of the spinal column formed from fused vertebrae.

Nerve Plexus

A network of intersecting nerves providing sensory and motor control to various body parts, such as the brachial plexus which controls the arm.

Phrenic

pertains to the diaphragm, especially in the context of the phrenic nerve, which controls its movements.