Sandstone,Inc

question 13

Multiple Choice

Sandstone,Inc.is considering a four-year project that has an initial after-tax outlay or after-tax cost of $80,000.The future cash inflows from its project are $40,000,$40,000,$30,000 and $30,000 for years 1,2,3 and 4,respectively.Sandstone uses the net present value method and has a discount rate of 12%.Will Sandstone accept the project?

• A)Sandstone accepts the project because the NPV is greater than $30,000.
• B)Sandstone rejects the project because the NPV is less than -$4,000.
• C)Sandstone rejects the project because the NPV is -$3,021.
• D)Sandstone accepts the project because it has a positive NPV of over $28,000.

---

Definitions:

Critical Thinking Skills

The ability to analyze facts, generate and organize ideas, defend opinions, make comparisons, draw inferences, evaluate arguments, and solve problems.

Cognitive Brain Function

Mental processes of perception, memory, judgment, and reasoning, as contrasted with emotional and volitional processes.

Social Purpose

Social purpose is the driving force behind an organization's efforts to achieve positive social impact and contribute to societal well-being beyond its primary commercial objectives.

Edelman Study

A comprehensive research project or report, often related to public relations or communications, produced by the Edelman firm.