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

question 12

Multiple Choice

Dumpe Industries is analyzing an average-risk project, and the following data have been developed. Unit sales will be constant, but the sales price will increase with inflation. Fixed costs will also be constant, but variable costs will rise with inflation. The project should last for 3 years, and there will be no salvage value. This is just one project for the firm, so any losses can be used to offset gains on other firm projects. What is the project's expected NPV? (Note: the constant annual capital cost deduction rate facilitates the calculations.)

• A) $8,536
• B) $8,985
• C) $9,458
• D) $9,931

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Definitions:

Electron Transport Chain

A series of complexes that transfer electrons from electron donors to electron acceptors via redox reactions, and couples this electron transfer with the transfer of protons (H+ ions) across a membrane.

Glycolysis

The metabolic pathway that breaks down glucose to pyruvate, generating energy and pyruvate molecules, occurring in the cytoplasm of cells.

Eukaryotes

Organisms whose cells contain a nucleus and other membrane-bound organelles, including animals, plants, fungi, and protists.

Phosphorylation

The introduction of a phosphate group into an organic molecule. See kinases.