Corner Jewelers, Inc A) $5903
B)$56

question 45

Multiple Choice

Corner Jewelers, Inc. recently analyzed the project whose cash flows are shown below. However, before the company decided to accept or reject the project, the Federal Reserve changed interest rates and therefore the firm's cost of capital (r) . The Fed's action did not affect the forecasted cash flows. By how much did the change in the r affect the project's forecasted NPV? Note that a project's expected NPV can be negative, in which case it should be rejected.
$\begin{array} { l c c c c } \text { Old r: } &8.00 \% & \text { New r: } & 11.25 \% \\\text { Year } & 0 & 1 & 2 & 3 \\\text { Cash flows } & - \$ 1,000 & \$ 410 & \$ 410 & \$ 410\end{array}$

• A) $59.03
• B)$56.08
• C) $53.27
• D) $50.61
• E)$48.08

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Definitions:

Ladder Logic

A graphical programming language used in programmable logic controllers (PLCs) that represents electrical control circuits with symbols resembling a ladder.

Functional Block Diagram

A graphical representation of a system’s functional relationships, showing blocks (functions) interlinked by lines which represent the system’s flow of data.

Power Rails

Electrical conductors that provide a supply voltage to a circuit or part of a circuit.

Functional Block Diagram

A Functional Block Diagram is a graphical representation that illustrates the relationships between functions within a system, more specifically in control systems and process engineering, showing the flow and function of control paths.