A Report from the Marketing Department Indicates That a New

question 85

Multiple Choice

A report from the marketing department indicates that a new product will generate the following revenue stream: $62,500 in the first year,$89,400 in year two,$136,200 in year three,$128,300 in year four,and $112,000 in year five.If your firm's discount rate is 11% and the cash flows are received at the end of each year,what is the present value of this cash flow stream?

• A) $379,435.35
• B) $421,173.24
• C) $476,036.04
• D) $528,400.00

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Definitions:

Syncline

A geological fold with layers that dip inward from both sides towards the central axis, typically forming a trough.

Monocline

A geological fold in which all strata are inclined in the same direction, forming a step-like structure.

Metamorphosed

Refers to rocks that have undergone a change in mineral composition and texture due to exposure to high temperature and pressure conditions.

Shale

A fine-grained sedimentary rock composed of mud that splits easily into layers, often used in the production of oil and natural gas.