Red Lake Mines, Inc

question 61

Multiple Choice

Red Lake Mines, Inc.is considering adoption of a new project requiring a net investment of $10 million.The project is expected to generate 5 years of net cash inflows of $5 million per year.In the project's sixth, and final year, it is expected to have a net cash outflow of $1 million.What is the project's net present value, using a discount rate of 12 percent?

• A)about $8.52 million
• B)about $8.00 million
• C)about $7.52 million
• D)none of these

---

Definitions:

Ponzo Illusion

An optical illusion where two identical lines appear to be different lengths due to their contextual background, demonstrating depth perception discrepancies.

Visual Field

The complete area visible in the side vision when focusing the eye on a single central point.

Appears Farther

A perceptual phenomenon where an object or distance is perceived to be more distant than it actually is.

Relative Height

A cue in visual perception that allows individuals to judge distance based on the apparent height of objects in the field of view.