What Happens to the NPV of a One-Year Project If

question 107

Multiple Choice

What happens to the NPV of a one-year project if fixed costs are increased from $400 to $600,the firm is profitable,has a 35% tax rate,and employs a 12% cost of capital?

• A) NPV decreases by $200.00.
• B) NPV decreases by $173.91.
• C) NPV decreases by $130.00.
• D) NPV decreases by $113.04.

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Definitions:

Representative

An individual or entity chosen or appointed to act or speak on behalf of others.

Random

Lacking any definite plan, purpose, or pattern, often used to describe events or selections made without a predictable outcome.

Cross-cultural

Relating to or comparing two or more cultures, exploring differences and similarities to understand human behavior across societal boundaries.

The Amazing Kreskin

A stage name for George Joseph Kresge, an American mentalist who became famous for his television performances that demonstrated seemingly psychic abilities.