A New Customer Has Placed an Order for a Turbine

question 16

Multiple Choice

A new customer has placed an order for a turbine engine that has a variable cost of $1.12 million per unit and a credit sales price of $1.64 million. Credit is extended for one period. Based on historical experience, payment for about 1 out of every 178 such orders is never collected. The required return is 2.1 percent per period. What is the NPV per unit if this is a one-time order?

• A) $516,407
• B) $421,819
• C) $477,244
• D) $534,290
• E) $351,056

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Definitions:

Self-Concept

An individual's perception of oneself, encompassing beliefs, feelings, and thoughts about one's abilities, appearance, and values.

Self-Actualising Person

An individual who has realized and fulfilled their own potential, achieving self-fulfillment and peak experiences, as described in Abraham Maslow's hierarchy of needs.

Peak Experiences

Highly positive moments of joy and fulfillment that stand out from everyday events.

Affiliate

To officially attach or connect to an organization or entity, becoming a member or partner.