Maple Cloud Services Inc

question 25

Multiple Choice

Maple Cloud Services Inc. is considering the development a brand new type of cloud computing server that requires $85,000 to be spent at the end of each of the next six years. Revenues of $100,000 per year for five years start at the end of the of the second year. Should Maple pursue this opportunity?

• A) No, because the Maple will be $21,960 worse off after at the end of the investment period.
• B) No, because the Maple will be $10,000 worse off after at the end of the investment period.
• C) No, because the Maple will only break even by the end of the investment period.
• D) Yes, because the Maple will be $4,870 better off after at the end of the investment period.
• E) Yes, because the Maple will be $75,000 better off after at the end of the investment period.

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Definitions:

Net Operating Income

The profit generated from a company's core business operations, excluding expenses and incomes from non-operational activities.

Artificial Tan Lines

A cosmetic effect created by applying tanning products or by exposure to sunless tanning methods, mimicking natural sun tan lines.

Variable

An element that can change or vary, often used in the context of variable costs in business or variable factors in research.

Fixed Production Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales.