Heartland,Inc

question 54

Multiple Choice

Heartland,Inc.is considering an eight-year project that has an initial after-tax outlay or after-tax cost of $180,000.The future after-tax cash inflows from its project for years 1 through 8 are the same at $38,000.Heartland uses the net present value method and has a discount rate of 11.50%.Will Heartland accept the project?

• A)Heartland accepts the project because the NPV is about $12,114.
• B)Heartland accepts the project because the NPV is about $11,114.
• C)Heartland rejects the project because the NPV is about -$11,114.
• D)Heartland rejects the project because the NPV is less than -$12,000.

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Definitions:

Shipping Option

Various methods and services provided by carriers for transporting goods from one location to another, differing in speed, cost, and handling requirements.

Factor Weighting Technique

A multi-criteria decision-making method that involves assigning different weights to various factors or attributes to rank or evaluate options.

Armchairs

Comfortable, upholstered chairs with side supports for a person's arms.

Name Brand Value

The perceived value added to a product or service by its brand name, which can influence customer choice.