Use the Following Information to Answer the Question(s)below

question 77

Multiple Choice

Use the following information to answer the question(s) below.
You are considering investing in a start-up project at a cost of $100,000.You expect the project to return $500,000 to you in seven years.Given the risk of this project,your cost of capital is 20%.
-The NPV for this project is closest to:

• A)$29,200.
• B)$39,500.
• C)$129,200.
• D)$139,500.

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Definitions:

Consignment

A sales arrangement in which goods are placed in the care of another, but ownership and title remain with the supplier until the goods are sold.

Net Income

The amount of earnings after all expenses and taxes have been deducted from revenue.

Ending Inventory

The cumulative worth of merchandise ready for purchase at the closure of a financial period.

LIFO Method

Last In, First Out method; an inventory valuation technique where the latest items added to the inventory are the first to be sold.