Table 12.6 Yong Importers, an Asian Import Company, Is Evaluating Two Mutually

question 46

Multiple Choice

Table 12.6
Yong Importers, an Asian import company, is evaluating two mutually exclusive projects, A and B. The relevant cash flows for each project are given in the table below. The cost of capital for use in evaluating each of these equally risky projects is 10 percent.
-The annualized NPV of Project A is ________. (See Table 12.6)

• A) $22,674
• B) $12,947
• C) $38,227
• D) $21,828

---

Definitions:

Existing Products

Existing products are those goods or services that a company is currently offering in the market, as opposed to new or upcoming product lines.

R&D (Research and Development)

This involves activities that companies undertake to innovate and introduce new products or services. It's a critical component of maintaining relevance and competitiveness in the market.

Interest

The charge for borrowing money, typically expressed as an annual percentage rate, or the income earned from investing funds.

Sunk Cost

A sunk cost refers to money already spent and permanently lost, which cannot be recovered and should not impact future business decisions.