Majestic Corporation Is Planning a 12 Year Project That Will

question 103

Multiple Choice

Majestic Corporation is planning a 12 year project that will have an initial cost of $900,000.During the first 3 years, there will be cash inflows of $80,000.Years 4-10 will see cash inflows of $350,000.Years 11-12 will see cash outflows of $20,000.If the company's required rate of return is 11%, determine the NPV of the project.

• A)-$175,023
• B)-$25,890
• C)$227,320
• D)$489,366

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Definitions:

Profit-Maximizing Price

The pricing point at which a firm can achieve the highest possible profit, given the demand and cost conditions.

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Per Capita Income

measures the average income earned per person in a given area within a specified year.

Marginal Revenue

The additional income received from selling one more unit of a good or service, crucial for decision-making in production levels.