Idaho Industries Inc

question 91

Multiple Choice

Idaho Industries Inc.is considering a project that has an initial after-tax outlay or after-tax cost of $350,000.The respective future cash inflows from its five-year project for years 1 through 5 are $75,000 each year.Idaho expects an additional cash flow of $50,000 in the fifth year.The firm uses the net present value method and has a discount rate of 10%.Will Idaho accept the project?

• A)Idaho accepts the project because it has an NPV greater than $5,000.
• B)Idaho rejects the project because it has an NPV less than $0.
• C)Idaho accepts the project because it has an NPV greater than $18,000.
• D)There is not enough information to make a decision.

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Definitions:

LLPs

Limited Liability Partnerships, a legal structure for businesses where partners have limited liabilities.

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The conduct and work that someone in a specific profession, committed to ethics and standards, engages in.

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