​Use the Following Setup for Question

question 6

Multiple Choice

​Use the following setup for question
A cloth manufacturing firm is deciding whether or not to invest in new machinery.The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000.The firm's current fixed costs are $9,000 and current marginal cost are $15.The firm currently charges $18 per unit.
-​If the cost of capital is 5% then the net present value of the investment is

• A)​$6,020.41
• B)$7,380.95
• C)-$7,380.95
• D)​$10,000

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Definitions:

Feedback Mechanism

A biological process where the output of a system regulates or controls its own function or activity.

Receptor

A protein molecule on the cell surface or within a cell that binds to specific molecules, such as hormones or neurotransmitters, triggering a specific cellular response.

Set Point

A term referring to the ideal value or range of values for a physiological parameter that the body tries to maintain through homeostasis.

Retroperitoneal Organs

Retroperitoneal organs are those located behind the peritoneal cavity, including the kidneys, pancreas, and parts of the intestines.