Harry's Inc

question 23

Multiple Choice

Harry's Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected.

• A) $105.89
• B) $111.47
• C) $117.33
• D) $123.51
• E) $130.01

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Definitions:

Average Total Cost

The total cost of production divided by the number of units produced, including both fixed and variable costs.

Robot Hours

The amount of time robots are operational and performing tasks in place of human labor.

Cost-output Elasticity

Cost-output elasticity measures the responsiveness of the cost of production to changes in the quantity of output produced, indicating the scale economies in production.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.