Bill Plans to Open a Do-It-Yourself Dog Bathing Center in a Storefront

question 148

Multiple Choice

Bill plans to open a do-it-yourself dog bathing center in a storefront. The bathing equipment will cost $160,000. Bill expects the after-tax cash inflows to be $40,000 annually for seven years, after
Which he plans to scrap the equipment and retire to the beaches of Jamaica.
Assume the required return is 15%. What is the project's PI? Should it be accepted?

• A) 0.88; yes
• B) 0.88; no
• C) 1.00; indifferent
• D) 1.04; yes
• E) 1.04; no

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Definitions:

Anxiety

A psychological condition marked by intense feelings of nervousness, apprehension, or dread that significantly disrupt an individual's routine life.

Depression

A psychiatric disorder defined by ongoing feelings of depression or a diminished interest in tasks, resulting in substantial interference with daily activities.

Behavior Pattern

Repeated ways of acting or reacting that are characteristic of an individual or group.

Hostility

An expression of anger, aggression, or resentment towards others, often manifesting in antagonistic or confrontational behavior.