​Use the Following Setup for Question

question 70

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.
-​Ricky is thinking about borrowing $10,000 from Fred.He promises Fred cash flows of $5000 for the next three years.If Fred's cost of capital is 10%,what is the Net Present Value of the investment for Fred?

• A)​-$126.55
• B)$1,342.76
• C)$2,434.26
• D)​-$1,322.31

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Definitions:

Satisfactory Definition

An explanation or description that meets the expected standards or adequately conveys the meaning of a concept.

Social Peacekeeper

An individual or entity that works towards maintaining harmony and preventing conflict in a community or society.

Coercive Territorial Control

The use of force or intimidation by state or non-state actors to dominate a specific geographic area and its population.

Police Culture

The norms, values, behaviors, and practices that are characteristic of law enforcement agencies and personnel.