Use the Information for the Question(s)below

question 31

Multiple Choice

Use the information for the question(s) below.
The Sisyphean Company is planning on investing in a new project.This will involve the purchase of some new machinery costing $450,000.The Sisyphean Company expects cash inflows from this project as detailed below: The appropriate discount rate for this project is 16%.
-The NPV for this project is closest to:

• A)$176,270.
• B)$123,420.
• C)$450,000.
• D)$179,590.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and labor directly involved in production.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain range or period.

Budgeted Balance Sheet

A projection of a company's financial position at the end of a specified period, forecasting assets, liabilities, and owner's equity.

Current Year

Refers to the present calendar year or fiscal year in which business operations and accounting transactions are being considered.