Granular Sugar Company Is Considering Buying a New Fork Lift

question 32

Multiple Choice

Granular Sugar Company is considering buying a new fork lift truck that will improve warehousing efficiency. the cost is $100,000 and it will last two years producing additional cash inflows of $61,500 each year. Granular's cost of capital is 10%. What is the net present value, internal rate of return, percentage margin of safety on the cost and margin of safety on the additional cash inflow?

• A) $6,736, 15%, 6.7%, $3,881
• B) $6,736, 14%, 7.6%, $6,358
• C) $17,409, 59.7%, 45.2%, $10,031
• D) $17,409, 19.7%, 9.2%, 45,329
• E) $23,000, 10%, 23%, $13,253

---

Definitions:

Example

A specific case or instance used to illustrate a concept, principle, or process.

Ethical Standards

Principles that guide behavior and actions based on what is morally right and wrong.

Culture

The collective beliefs, practices, languages, creations, historical accounts, folklore, and structures of a community that are transmitted through successive generations.

Future Orientation

A mindset or perspective that focuses on planning, anticipating, and preparing for future events, goals, or possibilities.