Third State Bank Wants to Add a New Branch Office

question 52

Multiple Choice

Third State Bank wants to add a new branch office.It has determined that the cost of construction of the new facility will be $1.5 million with another $500,000 in organizational costs.The bank has estimated that it will generate $319,522 per year in net revenues for 20 years.If Third State requires a 17% return on its money,what is this project's net present value?

• A)$201,805
• B)-$201,805
• C)$1,798,195
• D)-$1,798,195
• E)$298,195

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Definitions:

Boycott

Effort to prevent people from purchasing a firm’s goods or services.

Mediator

A neutral third party who facilitates negotiation and conflict resolution between disputing parties.

Labor Dispute

A conflict between employers and employees or between employees themselves, typically over issues like wages, working conditions, and union representation.

Impartial

Not biased or partial; fair and just, treating all rivals or disputants equally.