A Project Has the Following Cash Flows: C₀ = -100,000;

question 60

Multiple Choice

A project has the following cash flows: C₀ = -100,000; C₁ = 50,000; C₂ = 150,000; C₃ = 100,000.If the discount rate changes from 12% to 15%,what is the CHANGE in the NPV of the project (approximately) ?

• A)12,750 increase
• B)12,750 decrease
• C)14,240 increase
• D)14,240

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Definitions:

Finished Goods

Goods that are finished being made but haven't been purchased or sent out to buyers yet.

Total Costs

The complete accumulation of costs involved in the production, operation, or project completion, encompassing both fixed and variable costs.

Overapplied Overhead

A scenario in which the overhead cost assigned to manufacturing exceeds the overhead cost that was actually incurred.

Net Operating Income

The profit a company generates from its operations, excluding taxes and interest.