(Present Value Tables Are Needed

question 139

Multiple Choice

(Present value tables are needed.) Mulheim Corporation is deciding whether to automate one phase of its production process. The equipment has a six-year life and will cost $410,000. Projected net cash inflows from the equipment are as follows: Mulheim Corporation's hurdle rate is 12%.
If Mulheim Corporation decides to refurbish the equipment at a cost of $60,000 at the end of year 6, it could be used for one more year and would have a $30,000 residual value at the end of year 7. Assume the cash inflow in year 7 is $65,000. What is the NPV of just the refurbishment?

• A)($1,040)
• B)$12,520
• C)$15,820
• D)$46,240

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Definitions:

Nontraditional Families

Family structures that deviate from the traditional model of a nuclear family, including single-parent families, blended families, and same-sex parent families.

Macrosystem

A term used in Bronfenbrenner's ecological systems theory to describe the cultural or societal context that influences an individual's development, encompassing societal norms, laws, and culture.

Microsystem

The immediate environment in which an individual interacts, such as family, school, and workplace.

Exosystem

A concept from ecological systems theory that refers to the wider societal contexts that indirectly influence an individual, such as parents' workplaces or community-based services.