A New Product Has Start-Up Costs of $389,200 and Projected

question 3

Multiple Choice

A new product has start-up costs of $389,200 and projected cash flows of $102,000,$187,500,and $245,000 for Years 1 to 3,respectively.What is the profitability index given a required return of 14 percent?

• A)0)98
• B)0)83
• C)1)16
• D)1)03
• E)1)21

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Definitions:

Adult Height

The final stature an individual achieves after the completion of growth, largely determined by genetics and environmental factors.

Immunization

A process that stimulates the body’s immune system by causing production of antibodies to defend against attack by a particular contagious disease. Creation of antibodies may be accomplished either naturally (by having the disease), by injection, by drops that are swallowed, or by a nasal spray.

Lethal Disease

A fatal illness capable of causing death.

Breast Milk

The milk produced by human breasts intended for infant feeding, rich in nutrients and antibodies.