Based Upon the Following Cash Flows, Should Chipper Nipper Cookie

question 44

Multiple Choice

Based upon the following cash flows, should Chipper Nipper Cookie Company introduce a new product, Rolling In Dough Pies? The initial investment is $180,000, and the cost of capital is 11.5%. ? $$\begin{array} { | l | l | } \hline \text { Years } & \text { Cash Flows } \\\hline 1 & \$ 80,000 \\\hline 2 & \$ 95,000 \\\hline 3 & \$ 95,000 \\\hline 4 & \$ 110,000 \\\hline 5 & \$ 110,000 \\\hline 6 & \$ 110,000 \\\hline\end{array}$$

• A) Yes, the rounded NPV is $228, 940.00 and the IRR is 46.62%.
• B) Yes, the rounded NPV is $75,428.63 and the IRR is 12.27%.
• C) No, the rounded NPV is -$57,277.32 and the IRR is 8.75%.
• D) No, the rounded NPV is -$221,275.39 and the IRR is 9.97%.

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Definitions:

Secure Attachment

A type of attachment characterized by strong emotional bonds, where individuals feel confident and assured in their relationships, often stemming from consistent caregiver responsiveness during childhood.

Mere Exposure

A psychological phenomenon where people tend to develop a preference for things merely because they are familiar with them.

Anxious Attachment

A style of attachment characterized by a strong fear of being abandoned by the relationship partner and a desire to maintain closeness.

Imprinting

An innate form of learning within a critical period early in an animal's life where it forms attachments and recognizes certain stimuli as essential.