What Is the Net Present Value of the Following Project

question 63

Multiple Choice

What is the net present value of the following project if the required rate of return is 15%? The initial investment is $150,000
$$\begin{array} { | c | r | } \hline \text { Years } & \text { Cash Flaws } \\\hline 1 & \mathbf { 3 0 , 0 0 0 } \\\hline 2 & \$ 80,000 \\\hline 3 & \$ 100,000 \\\hline 4 & \$ 200,000 \\\hline\end{array}$$

• A)$203,690
• B)$180,665
• C)$150,000
• D)$116,681

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Definitions:

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs like rent, utilities, and maintenance of equipment.

Selling and Administrative Expenses

These are indirect costs that are not directly tied to the production of goods or services, including sales personnel salaries, advertising, and office rent.

Period Costs

Costs that are not directly tied to the production process and are expensed in the period they are incurred, such as selling, general, and administrative expenses.

Administrative Costs

Expenses related to the general administration of a business, including salaries of executives, office supplies, and legal and accounting services.