Simplicity Printers Is Considering a Project with the Following Cash

question 15

Multiple Choice

Simplicity Printers is considering a project with the following cash flows:
Initial Outlay = $126,000
Cash Flows: Year 1 = $44,000
Year 2 = $59,000
Year 3 = $64,000
If the appropriate discount rate is 11.5%,compute the NPV of this project.

• A) -$14,947
• B) $2,892
• C) $7,089
• D) $41,000

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Definitions:

Investment Account

An account held at a financial institution that holds securities, cash, and other assets for investment purposes.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from its total revenue, indicating the company's profit.

Earnings

Earnings typically refer to a company's profit, specifically the amount of money it makes from its operations over a certain period.

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash, based on the number of shares they own.