Jiminez Company Has Two Investment Opportunities

question 34

Multiple Choice

Jiminez Company has two investment opportunities. Both investments cost $5,000 and will provide the following net cash flows: What is the net present value of Investment A's cash flows assuming an 8% minimum rate of return? Use Appendix Table 2. (Do not round your intermediate calculations. Round your answer to the nearest whole dollar.)

• A) $14,936.
• B) $4,936.
• C) $7,000.
• D) $12,000.

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Definitions:

Historic Cost

The original monetary value of an asset or transaction at the time it occurred, without adjustments for inflation or other factors.

Partner Withdraws

Amounts taken out of a partnership by a partner for personal use, reducing the partner's capital account in the business.

Capital Account

An account on a nation's balance of payments that records all transactions involving the purchase or sale of assets, or in business, the account showing the net worth of a business entity.

Bonus

An extra payment given to employees as an incentive or reward beyond their regular compensation.