The Owner of a Number of Gas Stations Is Considering

question 57

Multiple Choice

The owner of a number of gas stations is considering installing coffee machines in his gas stations. It will cost $270,000 to install the coffee machines, and they are expected to boost cash flows by $120,536 per year for their five-year working life. What must the cost of capital be if this investment has a profitability index of 1?

• A)1.89%
• B)3.78%
• C)7.55%
• D)9.44%

---

Definitions:

Scenery

The natural landscape or surrounding view, particularly those that are visually appealing or picturesque.

Group Buying

Group Buying refers to a purchasing model where a group of individuals agree to buy a product or service, thereby securing discounts from vendors due to the bulk order.

Airbnb

An online marketplace for lodging, primarily homestays for vacation rentals, and tourism activities, allowing people to list or book accommodations worldwide.

Coast Guard Academy

A military academy aimed to educate future officers of the United States Coast Guard.