The Johnson Drum Company Is Planning to Build a New $$\begin{array} { l l } \text { Year } & \text { Cash Outflow } \\0 & \$ 3,500,000 \\1 & \$ 4,750,000 \\2 & \$ 6,100,000\end{array}$$

question 76

Multiple Choice

The Johnson Drum Company is planning to build a new factory. The purchase of the land, building the plant, and installation of equipment will take place over a 2-year period. The following are planned cash outflows: $$\begin{array} { l l } \text { Year } & \text { Cash Outflow } \\0 & \$ 3,500,000 \\1 & \$ 4,750,000 \\2 & \$ 6,100,000\end{array}$$ Johnson Drum's cost of capital is 14%, and its marginal tax rate is 35%. What is the NINV measured in present value terms today?

• A) $14,350,000
• B) $12,356,650
• C) $9,327,500
• D) $8,035,788

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Definitions:

Informally Recognize

The act of acknowledging or praising an individual's or team's achievements or contributions in a casual or non-official manner.

Conflicting Goals

Conflicting Goals occur when two or more objectives or desired outcomes are at odds with each other, making it challenging to achieve both simultaneously.

Emotional Maturity

The ability to understand, manage, and appropriately express one's emotions, often leading to improved relationships and decision-making.