Use the Information for the Question(s)below

question 59

Multiple Choice

Use the information for the question(s) below.
-The owner of a hair salon spends $1,000,000 to renovate its premises,estimating that this will increase her cash flow by $220,000 per year.She constructs the above graph,which shows the net present value (NPV) as a function of the discount rate.At what dollar value should the NPV profile cross the vertical axis?

• A)$780,000
• B)$1,000,000
• C)$220,000
• D)The vertical axis crossing point cannot be calculated since the cash inflows are a perpetuity.
• E)Cannot be determined because inadequate information is given.

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Definitions:

Cardiovascular System

The body’s system comprised of the heart and blood vessels, responsible for circulating blood and nutrients throughout the body.

Skeletal Muscles

Muscles attached to the bones that are responsible for the movement of the human body.

Recessive

Pertaining to a gene that is masked by a dominant gene and only expressed in the phenotype when paired with another recessive gene.

Defective Gene Alleles

Variants of genes that have mutations or alterations, leading to the dysfunction of the encoded proteins and potentially causing genetic disorders.